ARTÍCULO
TITULO

An Evaluation Of Income Tax Incentives Available To The South African Oil And Gas Industry

Anneke Maré Moolman    
Pieter van der Zwan    

Resumen

The oil and gas sector is advantageous to South Africa. However, the country?s oil and gas reserves are minimal in relation to many other countries, reducing attractiveness to prospective investors. In the aim of promoting investment in the oil and gas sector of South Africa, attraction should be improved by other means, such as an alluring regulatory environment, including the taxation regime.The research conducted in this study aimed to determine whether the income tax legislation in South Africa provides a meaningful incentive for oil and gas companies to compete for international investment in this industry without unnecessarily compromising the State?s share of wealth from the industry. A literature review established the use and characteristics of meaningful tax incentives. The incentives contained in South Africa?s oil and gas tax environment were evaluated to determine whether the incentives can attract investment to the sector.Findings indicate that the incentive contained in the Tenth Schedule generally meets identified characteristics of meaningful tax incentives, enabling South Africa to lure investment to the sector. The interaction between this incentive and the remainder of the legislation, however, reduces the stability afforded to investors and may create uncertainty in the application of the incentive. Also, an apparent lack of monitoring of the regime may result in the impact and necessity of the incentive not being determinable, especially if the investor environment were to be affected by new discoveries.

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