Consultation underway on Coega IDZ transition to Special Economic Zone


The Department of Trade and Industry says in keeping with the Special Economic Zones (SEZ) Act, consultations are underway with industrial development zones and provinces “to agree on a suitable approach” to the transition of Coega and other IDZs from IDZs to SEZs within three years.

In a presentation to the National Assembly’s Trade and Industry Committee, the department said in terms of its project plan consultations on the final draft SEZ regulations with, among others, existing IDZs, will take place this month.

It said it intended to have the regulations ready for publication in the Government Gazette by September 30.

The intention is to have the proposed regulations published in the Gazette in October and allow 30 days for public comment with the regulations finalised and published the following month.

In addition to the existing IDZs at Coega and East London, the Eastern Cape is also applying for the designation of a new SEZ around Mthatha that will focus on agro-processing and that is currently at the technical feasibility and business plan stage.

All the other nine proposed SEZ’s are at the same stage with the exception of the King Shaka Industrial Park in Kwa-Zulu-Natal, which has already received designation.

The transition from an IDZ to an SEZ will mean Coega will become eligible for a suite of incentives that includes a 15% corporate tax rate for qualifying companies locating in an SEZ.

In addition, companies locating in SEZs will be eligible for an accelerated depreciation allowance for buildings, with new buildings depreciated for 11 years at 20% in the first year and 8% thereafter, and improvements to buildings depreciated at 20% a year.

Further incentives include one that focuses on employment for employees earning lower salaries with no age limit applicable for companies locating within SEZs.