Abstract
Environmental policy integration is essential in achieving environmental sustainability goals across non-environmental sectors. Dilution of environmental goals in environmental policy integration should be avoided. The conservation tax incentive of the repealed section 37C(5) read with section 18A of the Income Tax Act 58 of 1962, replaced by section 37D, represents environmental policy integration in tax legislation. The study primarily aimed to determine whether the replacement will benefit contracted landowners, using historical comparative methodology. Secondarily, a historical review of the literature on environmental policy integration and alternative incentives for private conservation efforts was performed. Although contracted landowners might obtain a smaller tax benefit annually, they will receive the same total tax benefit over the entire period of the deduction. They will have certainty regarding their annual tax benefit. As certainty is preferred by most landowners, the study concluded that dilution of environmental policy integration goals will not result from the amended legislation.
Highlights
AND BACKGROUNDThe global sustainability agenda requires that environmental conservation goals be recognised along with economic and social objectives (World Commission on Environment and Development (WCED), 1987)
Landowners will benefit if they receive a larger tax benefit or, alternatively, if the new legislation provides certainty regarding the tax benefit obtained
5.2 Pre-amendment section 18A of the Income Tax Act No 58 of 1962 (1) Notwithstanding the provisions of section 23, there shall be allowed to be deducted from the taxable income of any taxpayer so much of the sum of any bona fide donations by that taxpayer in cash or of property made in kind, which was paid or transferred during the year of assessment to
Summary
The global sustainability agenda requires that environmental conservation goals be recognised along with economic and social objectives (World Commission on Environment and Development (WCED), 1987). In South African income tax legislation the integration of environmental goals in nonenvironmental policy has taken shape in the form of a conservation tax incentive This incentive was previously granted in terms of the repealed section 37C(5) read with section 18A of the Income Tax Act 58 of 1962 (the Act) (Republic of South Africa, 1962). The premise of certainty is important when tax benefits for conservation efforts are granted, and confirms the findings of Van Wyk (2010) This reinforces the objective initially stated by National Treasury (2009) that environmental goals should be prioritised in tax legislation. This amendment became effective for years of assessment commencing on or after 1 March 2015 (National Treasury, 2014b)
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