BirdLife South Africa’s Fiscal Benefits Project, under the Policy & Advocacy Programme, and in partnership with the Department of Environmental Affairs and the South African National Biodiversity Institute, has successfully concluded discussions with National Treasury regarding a proposed amendment to the Income Tax Act.
Momentously, Treasury has agreed to begin the formal process to introduce second new tax incentive into legislation for the benefit of landowners and communities declaring and managing our protected areas.
Globally, we need to be spending 20-30 times more than our current global investment in the environment to effectively conserve the planet. Simply put, we spend more on carbonated soft drinks than we do on safeguarding nature. This massive deficit in investing in the environment is known as the Biodiversity Finance Gap. It is without question one of the most significant challenges the conservation sector faces.
Within South Africa, our Biodiversity Finance Gap requires us to be spending up to 67% more to genuinely protect South Africa’s natural resources and biodiversity. Meaning, we need to mobilize resources on a large scale if we are to stem the tide of extinctions, facilitate the Wildlife Economy and its benefits to communities, and sustainably manage the ecological infrastructure that underpins the wellbeing of South Africa’s citizens and its economy.
How do we practically do this? How do we create financial solutions that provide the money needed to conserve our biodiversity? One solution is the creation of tax incentives that allow landowners and communities to pay less tax every year when they commit to protecting and managing protected areas.
In 2015, the Fiscal Benefits Project introduced, tested and applied South Africa’s first effective biodiversity tax incentive, section 37D, in answer to the Biodiversity Finance Gap.
This biodiversity finance solution is internationally unique and is listed as a global solution for the planet. It allows committed landowners and communities to a substantial tax deduction based on the actual value of the land formally protected as a Nature Reserves or National Park. It is anticipated that Section 37D will contribute approximately R1, 43 billion to South Africa’s conservation efforts by 2026.
In 2018, the Fiscal Benefits Project has secured National Treasury’s support to repeat this success by amending the Income Tax Act again and creating an additional tax incentive for protected areas. This is momentous and will further bolster the closure of the Biodiversity Finance Gap and facilitate the provision of considerable finance to landowners and communities managing South Africa’s protected areas.
The proposed incentive will be aimed at allowing a tax deduction of all conservation management expenses, essentially creating the mechanism required to properly manage our priority biodiversity.