Industrial Development Zone (IDZ)
South Africa’s broad economic policy includes schemes designed to encourage and promote international competitiveness in the country’s manufacturing sector. This is set out in government’s Economic Programme of Action, where Industrial Development Zones (IDZs) are created in order to encourage increased levels of foreign direct investment in the economy. This will be achieved primarily through the giving of incentives to attract foreign and local investment within these zones in order to boost the country’s economic attractiveness.
The South African Industrial Development Zone concept
An IDZ is a purpose built industrial estate linked to an international air or sea port, which might contain one or multiple Customs Controlled Areas (CCA) tailored for manufacturing and storage of goods to boost beneficiation, investment, economic growth and, most importantly, the development of skills and employment in these regions.
The following SARS offerings are available to CCA enterprises:
- Relief from customs duties at time of importation into a CCA:
- any goods for storage
- raw material for manufacture
- machinery used in the manufacturing process
- Simplified customs procedures:
- Clearance of goods – importation, exportation and transit
- Application for designation, licensing and registration
- Release of cargo
- Consideration of stage consignments if the requirements are met
- Consideration of release under embargo
- Lesser amounts for security – licensing, registration and movement of bonded goods
- Fiscal incentives on goods when:
- goods are imported for storage
- raw material is imported for manufacture
- machinery is imported for used in the manufacturing process; or
- any material is imported for use in the construction of the CCA infrastructure
- goods are exported from the CCA to a foreign country
- any services are rendered to a custom control area enterprise CCAE
- Subsidised infrastructure :
- No import duties are payable on goods imported for use in the construction and maintenance of the infrastructure of a CCA in an IDZ (rebate item 498.02).
- No Value-Added Tax shall be payable when:
- Goods are imported for use in the construction and maintenance of the infrastructure of a customs controlled area
- Land is supplied to a CCAE in the CCA for sale, letting or any other agreement
- Electricity or water is supplied to the IDZ Operator or CCA Enterprise located in the CCA.
How to Control the Movement of Goods?
In addition to the Customs client number, a CCA number [one per CCA] will be allocated by the system. The number will be of paramount importance when goods are moved between warehouses/rebate users in the same or other CCAs.