South Africa to expand TV tax credits

The country’s Department for Trade and Industry is thought to be tweaking the final wording on documents that will see the introduction of a new foreign production rebate of 20%. Broadcast understands this will be offered on productions that would not previously have met the co-production status criteria for a 25% tax break.

If the foreign programme is also post-produced in SA, the total rebate will climb to 22.25%. The incentive is thought to cover both factual and scripted productions costing R10m (£800k) an hour or more to make.

The changes will also include a 25% credit on any post production carried out in SA on any TV project.

No one from the South African DTI was available for comment despite repeated attempts over two days, but the moves, as explained to Broadcast, come as part of a raft of measures to attract production to the country, following last year’s announcement that the R20m cap on the 25% co-production rebate would be lifted.

Another tax incentive, modelled on the UK’s Enterprise Investment Schemes (EIS), came into force in January.

Although the government has not given official confirmation of the changes, a handful of producers who have been lobbying for the move have been tipped the wink that it will be signed off this week.

Michael Auret, of producer-distributor Spier Films, told Broadcast the timing was beneficial given the UK government’s plans to introduce its own tax break. But he said the industry’s greater concern was competing with other international territories.

“The unfortunate thing for us is that the UK is putting these incentives in, but we have been lobbying our government for some time to keep pace with Australia,” he said. “SA is roughly in the same time zones as the UK and Europe, we are just an overnight flight, and costs are much lower, so we do have an advantage in terms of the amount producers can offset by coming here.

“We don’t begrudge the UK its right to adopt incentives but it increases the competition between different territories for work,” said Auret. “We may lose some productions back to the UK, but there are still a lot that will want our locations because of the diversity of our environment – when you shoot in SA you could be in Iraq, Afghanistan or Vietnam.”

South Africa has been home to a wide range of productions thanks to its existing tax breaks, including three series of Left Bank’s Sky1 drama Strike Back, and more anachronistically, C4’s English Civil War drama The Devil’s Whore.

As a result the changes to the incentives, Auret is launching a new company specialising in long-form drama alongside producers Marlow de Mardt and Bridig Olën, of Do Productions.

Olen said: “With the new 20% foreign incentive being introduced we expect to see a lot more TV drama coming to our shores and the partnership with Spier will enable us to offer clients a turnkey operation in production and finance.”

This story was originally published by Broadcast.