National Report Section 37D 2015-2020
The first national report on South Africa’s one-of-a-kind biodiversity tax incentive has been released and captures the results of this green finance innovation:
Innovative Finance at Wilderness Foundation Africa (WFA) focuses on the development of finance solutions for sustainable landscapes. This involves the provision of niche tax services for one of the country’s foremost conservation finance solutions: Section 37D of the Income Tax Act No. 58 of 1962 (the ITA). Section 37D is available to qualifying private and communal taxpayers who declare protected areas on their land.
Protected areas, declared on private or communal land, are key to safeguarding South Africa’s incredible biodiversity and the functioning of ecological infrastructure essential to the benefit of its people and its developing economy. Expanding, governing, and managing protected areas is a costly undertaking and limited resources and capacity, as well as other socio-economic constraints, hinder these processes. Without effective management, protected areas fail to achieve what they were created for, and without viable and sustainable business operations to support management costs, effective management is no longer feasible. The globally unique section 37D tax incentive provides an extraordinary tax deduction to South Africa’s protected areas, bringing crucial financial sustainability to these areas and their stakeholders.
The innovation for this tax incentive arose out of the Fiscal Benefits Project run through BirdLife South Africa in collaboration with Wilderness Foundation Africa, originally funded by the WWF Nedbank Green Trust and mainstreamed through funding from the GEF 5 Biodiversity and Land Use Project in partnership with SANBI. The tax incentive is now implemented by WFA’s Innovative Finance’s Environmental Tax Services. This National Report on Section 37D 2015-2020 showcases the success and effectiveness of section 37D as a fiscal tool in addressing the country’s environmental, social, and economic challenges.
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