How to get 50 million from government – Section 12J

Dear citizens I’m hereby doing a job which our government didn’t do so well. Why would they not loudly tell us the good news that they are willing to give us up to R50 million?

This is Section 12J. Basically it allows any qualifying individual or company to not pay tax to the maximum of R50 million, provided they invested matching amounts (up to the R50 million) with a qualifying Venture Capital Company (VCC or VC). You get 100% of the amount you invested back, i.e. you deduct the same amount of monies invested from your taxable income in that year.

A VC is a company that is given or collects money from individuals or organisations (trusts, companies, etc) to make equity investments in for-profit-companies – in exchange for ownership shares. Meaning, the VCC holds shares in these companies it invests – on behalf of its investors, or the people/firms that gave it money.

Section 12J is basically a cash back to invest. You pay tax anyway, therefore why not use this section to not pay it and at the same time enrich yourself.

As my friend Ofentse Mokgatle often says, “Not everyone can be an entrepreneur; but everyone can be an investor.”

A number of popular venture capital companies have taken advantage of this section.

This is one of the most important sections in our constitution about entrepreneurship. It empowers the nation to develop itself.

Ola da! Read more on the section here on the South African Revenue Services (SARS) website.

My fourth and third books are out, ‘The Anxious Entrepreneur’ and ‘Tales of an African Entrepreneur