The South African Institute of Taxation (SAIT) submitted a proposal to the National Treasury highlighting a legislative gap in section 12B of the Income Tax Act, which currently does not explicitly accommodate battery energy storage systems. These assets, though primarily for storage, are treated by regulators like NERSA as electricity-generating due to their role in energy supply via the Battery Energy Storage Independent Power Producer’s Procurement Programme (BESIPP). SAIT argues that battery storage assets should qualify for the accelerated capital allowance under section 12B, similar to other generation assets, to incentivize investment and better align tax policy with energy infrastructure initiatives.
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