Tax incentive’s benefits EI for biodiversity, people and economy
The Biodiversity and Land Use Project funded the development and awareness raising of one of South Africa’s key financial solutions for conservation landscapes, through the amendment of section 37D of the Income Tax Act (ITA) No. 58 of 1962 to make provision for Protected areas.
The global financial underspend on environmental efforts is well recognised. In South Africa alone we currently face a considerable conservation finance shortfall. Yet, sustainable landscapes are critically important. They provide enduring benefits and ecological infrastructure for biodiversity, people, and the economy.
Protected areas (PAs) contribute significantly to South Africa’s National Development Plan 2030 goals, notably raising employment through faster economic growth; improving the quality of education, skills development, and innovation; ensuring that people have access to clean running water in their homes; ensuring environmental sustainability and resilience to future shocks; and to increase the amount of land and oceans under protection.
As such, PAs require adequate and sustainable financing and capacity resourcing, now more than ever under the Covid-19 crisis. Developing new and innovative finance sources is no small feat. One such example, funded by the Biodiversity and Land Use Project, is section 37D of the ITA No. 58 of 1962; which has introduced close to R200 million for protected areas since its enactment in 2015 through WFA’s Environmental Tax Services.
Following on from the success of this unique conservation finance solution, the Sustainable Landscape Finance Coalition (the Coalition), was launched by Wilderness Foundation Africa (WFA) and WWF-SA.
The coalition has as its primary aim addressing the urgent need for additional sustainable finance for landscapes in South Africa and the SADC region. The Coalition fosters a national network to act as a central focal point for cohesive stakeholder and partner engagement to develop and implement a variety of innovative and integrated financial solutions, notably for protected and conserved areas.
Furthermore, the Coalition conducts ongoing work in developing further finance solutions, including investigations into another biodiversity tax incentive. This tax incentive, for biodiversity management agreements (BMAs), is encased in section 37C(1) of the ITA and has thus far not been applied successfully and is not operational.
The BMA tax incentive, and other innovative finance solutions, are being investigated, developed and, where feasible, implemented through the Coalition’s Finance Solution Incubators. The Coalition’s BMA Tax Incubator aims to unlock this particular incentive and allow for additional flows of finance to South Africa’s most important species and ecosystems.
For more information on the Coalition and its Incubators, please contact Candice Stevens at email@example.com.