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The recent World Bank report recommending that South Africa consider extending the 15% corporate income tax incentive across all Special Economic Zones (SEZs) presents an important opportunity to reflect on how to strengthen the country’s investment competitiveness.

The Chairperson of the Select Committee on Economic Development and Trade, Ms Sonja Boshoff, said contributions that encourage informed, evidence-based discussions on improving South Africa’s investment environment were most welcomed.

“While the recommendation itself requires careful consideration by government, it should form part of a broader national conversation on ensuring that our Special Economic Zones remain globally competitive, well governed and capable of delivering meaningful economic outcomes they are founded for,” the Chairperson said.
“South Africa is competing for investment in an increasingly competitive global economy. Investors are attracted not only by tax incentives but also by policy certainty, efficient regulatory processes, reliable infrastructure, energy security, effective logistics, skilled labour and institutions that inspire confidence. Strengthening our SEZ programme therefore requires a holistic approach that addresses all the factors influencing investment decisions.”

The select committee has consistently emphasised that the success of Special Economic Zones should be measured not by the incentives they offer but by the investment they attract, the industries they develop, the exports they generate and, most importantly, the sustainable employment opportunities they create for South Africans.

Through its oversight work, the committee observed that while some SEZs continue to perform exceptionally well, others require stronger governance, improved implementation and greater accountability to realise their full potential. “This reinforces the importance of regularly evaluating whether existing policy instruments are achieving their intended objectives and identifying reforms that can strengthen South Africa’s competitiveness.”

Ms Boshoff said that the World Bank’s recommendations should also encourage broader thinking about how our Special Economic Zones can become platforms for innovation and policy experimentation. “International experience demonstrates that the world’s most successful SEZs are characterised not only by competitive tax regimes, but also by efficient administration, streamlined regulation, faster approvals and business-friendly operating environments that support investment, industrial development and employment,” she said.

“Within that context, Parliament should remain open to carefully designed pilot initiatives that assess whether reducing unnecessary regulatory barriers within selected SEZs could further enhance South Africa’s competitiveness.” The Chairperson said that such initiatives should be evidence-based, transparent and subject to robust parliamentary oversight, while continuing to uphold constitutional protections, fair labour standards and responsible governance. “Where reforms demonstrably attract investment and expand employment opportunities, the lessons learned could help inform future policy development.”

Ms Boshoff added that the Select Committee on Economic Development and Trade will continue to monitor the performance of South Africa’s Special Economic Zones and support policy discussions that are evidence-based, fiscally responsible and focused on attracting investment, strengthening industrialisation and creating sustainable employment opportunities for South Africans.
 
Issued By: The Parliamentary Communication Services On Behalf Of The Chairperson Of The Select Committee On Economic Development And Trade, Ms Sonja Boshoff.