Production Incentive (PI)

What is the Production Incentive (PI)?

The Production Incentive (PI) forms part of the overall Clothing and Textile Competitiveness Programme (CTCP) and flows from the implementation, by the Department of Trade and Industry (the dti), of customised sector programmes (CSPs) for the clothing, textiles, footwear, leather and leather goods industries.

Production Incentive (PI)

Eligible Enterprises

Qualifying Entities for the Production Incentive

SA and Foreign owned companies based in SA engaged in the manufacture of:

  • Clothing manufacturers;
  • Textile manufacturers;
  • Cut, Make and Trim (CMT) operators;
  • Footwear manufacturers;
  • Leather goods manufacturers;
  • Leather processors (Specifically for Leather Goods and Footwear industries);
  • Design Houses (Provided the design house partners with one or more CMTs).

The PIP specifically excludes goods manufactured for the automotive sector which qualifies for any incentive programme offered for that sector.

Mandatory Conditions for the Production Incentive

  1. The applicant must be a registered legal entity in South Africa in terms of the Companies Act, 1973 (as amended) or the Close Corporations Act, 1984 (as amended). Section 21 companies or „not-for-profit-or-gain‟ organisations are specifically excluded from applying.
  2. The operations of the company applying must be classifiable as manufacturing (SIC code 3) in terms of the „Standard Industrial Classification of all Economic Activities‟. Design Houses are, however allowed to participate in the programme.
  3. The applicant must be a taxpayer in good standing and must, in this regard, provide a valid tax clearance certificate.
  4. The Applicant must, where applicable, be bargaining council compliant and must, in this regard, provide evidence of compliance.
  5. The applicant must comply with all relevant environmental regulations, applicable to its operations and must, in this regard, provide evidence of compliance.
  6. Should the company have any pending litigation against it, the outcome of which may have a material impact on the company‟s financial position, then this needs to be brought to the attention of the CTCP Desk at the time of application.
  7. Should the company have any intentions or plans to retrench or downsize its manufacturing processes, such intentions or plans must be brought to the attention of the CTCP Desk.

Applicants are required to acquire relevant investments included in the original application and/or to implement those interventions approved by the IDC. Amendments in respect of qualifying expenditure will require a new redemption
application to be prepared and approved.