Tax change expected to boost fibre roll-out in South Africa

As part of a number of business incentives, Treasury has announced that it will be reviewing the write-off period for electronic communication cables as part of its 2018 budget.

“Most companies that provide telecommunications infrastructure have been moving from copper to fibre optic cables,” it said in its Budget review.

“To align the tax system with technological advances and international practice, government proposes reducing the period over which electronic communication lines and fibre optic cables are written off.

“Government will consider further alignment between taxpayers that own these assets and those with the right to use them,” it said.

What does this mean for fibre access in South Africa?

In an analysis of the planned review, Alwina Brand Tax Partner at PwC explained that at present, companies that provide telecommunications infrastructure are allowed to write off lines or cables used for the transmission of electronic communications over a period of 15 years under section 11D of the Income Tax Act.

“A more beneficial tax allowance system would hopefully boost additional investment in fibre optic infrastructure which in turn would stimulate business growth,” she said.

“These entities will certainly welcome the announcement that the Government proposes reducing the period over which electronic communication lines and fiber optic cables are written off, in a bid to align the tax system with technological advances and international practice.”


Read: Smartphones are officially ‘luxury items’ in SA – and they’re getting taxed as such

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