Abstract
M.Com.
South Africa is planning to move to bioethanol as a replacement for gasoline. The official blending date was 1 October 2015, but to date the author is unaware of any petrol pumps that pump bioethanol fuel. However, in order to encourage the production of bioethanol, South Africa currently has some tax incentives in place.
The present paper considered tax incentives that were employed by the two leading bioethanol producing countries, the United States of America (USA) and Brazil, and analysed the principles that underpinned these incentives. These principles are considered to have been successful in supporting the strategies that encouraged bioethanol production in those countries.
To make allowance for principles on good incentives, the author considered the duration for which incentives were offered, the role players who were incentivised, what other strategies (other than tax incentives) were used to encourage bioethanol production, the role of government in encouraging bioethanol production through tax incentives, and the sphere of government that should incentivise bioethanol production.
The paper looked at the incentives offered by South Africa, and assessed if South Africa took into account the important principles that were applied by the USA and Brazil. Principles that were considered not to have been taken into account were highlighted. The paper concludes with recommendations on strategies and ideas for future research on the topic.