Tax incentives for South African biodiversity stewards
This is what fiscal benefits and environmental tax specialist Candice Stevens has been working to achieve. Stevens has received funding from the WWF Nedbank Green Trust for a two-year biodiversity stewardship fiscal benefit pilot project.
Stevens, who is the sole expert in South Africa on this area of tax, believes that appropriate fiscal benefits will boost to the long-term sustainability of private landowners' invaluable contributions to conservation and the protection of ecosystems in the country.
Stevens' passion for conservation and birding led her into this field, to which she has contributed her expertise as a fulltime staff member of BirdLife South Africa, one of the WWF Nedbank Green Trust's partners in conservation.
'The state does not have sufficient resources to fund and manage expanded conservation areas in South Africa, and private landowners therefore play a key role in achieving this through the national BDS initiative,' Stevens says.
BDS is endorsed by the national Department of Environmental Affairs and implemented by provincial conservation agencies in partnership with key conservation organisations. It is the mechanism through which individual landowners and communities can play their part in environmental conservation by having their land declared a protected environment or nature reserve.
The WWF Nedbank Green Trust has funded several biodiversity stewardship projects that have led to land in key watershed areas in Mpumalanga, KwaZulu-Natal and the Free State being declared protected environments.
'The benefit to the landowner is a high level of formal protection, which includes legal protection from incompatible land use, but there is currently no active national legislation to incentivise or compensate these landowners for the time spent, management costs they incur or potential loss of income they incur to protect these areas,' Stevens continues.
'In 2008 conservation tax incentives were placed in the Income Tax Act with the aim of supporting biodiversity stewardship, but they were cumbersome and open to legal misinterpretation from a tax point of view. The result was that the incentives were difficult for landowners to access and they effectively became defunct.'
From February 2015, at the beginning of this project, Stevens set out to rectify the incentives situation and worked on the following aims:
- To test the use and applicability of specific environmental tax incentives with a wide range of private landowners in declared nature reserves and protected areas, including Important Bird and Biodiversity Areas and high-water-yield grassland areas.
- To lobby and work with Treasury on different types of workable conservation tax incentives for different landowners.
- To develop benefits above and beyond the current tax benefits available to landowners and broaden the scope of fiscal benefits.
To lobby and work with Treasury Stevens teamed up with Tracey Cumming from the Department of Environmental Affairs. Cumming currently heads the Biodiversity Finance Initiative, which is a global partnership managed by the United Nations Development Programme.
'We presented motivations for a new tax incentive (section 37 D) to be written into the Income Tax Act that rewrites the older tax incentives for nature reserves and national parks,' Stevens says. 'Through the incentive we proposed, a landowner would be able to deduct the value of the land declared a nature reserve.'
The tax incentive would be extended to all landowners, including communities within Nature Reserves or in the buffer zones of National Parks, who, for example, own commercial lodges or operations.
'It's complex because there isn't a one-size-fits-all fiscal benefit for this vast landscape picture, but we do have a growing suite of mechanisms to support landowners, including tax benefits, and hopefully rates benefits down the line (this is currently being explored at a national level).'
Landowners also benefit from services supported by the provincial conservation agencies and non-governmental organisations, including access to public works programmes such as Working for Water, to clear alien invasives from water catchments that are part of their land and extension services.
Stevens' project funding from the WWF Nedbank Green Trust finishes at the end of January 2017, but fortunately the project will continue by means of a partnership between Birdlife South Africa and the South African Biodiversity Institute under the GEF 5 Biodiversity and Land Use Project.
'From 2017 to the end of 2019 my aim is to take all the findings from the pilot project and to mainstream them,' she says. 'Hopefully by then the fiscal benefits will be available to all qualifying landowners across the country. The land value deduction, in particular, will be a significant achievement, as it will be a global first.'