Microbial Biological Fertilizers International

Overview

Since 2022, Catalyst Solutions has worked with MBFi, a South African agri-science developer, on four approved Section 11D R&D projects spanning crop protection chemistry and soil biology. By identifying the qualifying research and documenting it to the DSTI’s standard, Catalyst Solutions helped MBFi recover R2.7 million in tax benefits, with more qualifying work still being identified as the research continues

Microbial Biological Fertilizers International (MBFi) develops biological technology for agriculture, with a product range built around four areas: green chemistry, bio-stimulants, rhizobium and adjuvants. The aim of the business is to help the agricultural industry grow more sustainably, giving farmers effective crop protection and soil biology with a lower environmental cost than conventional chemistry carries.

Behind that range sits a substantial research programme. MBFi’s team of microbiologists, chemists, soil scientists and plant pathologists develops formulations from fundamentals, often in areas where no published field data exists to draw on.

Catalyst Solutions has worked with MBFi since 2022, identifying the qualifying research across its programme, documenting it to the standard the DSTI requires, and securing approval for the work. To date, that has returned R2.7 million in additional tax benefit, with further qualifying activity still being identified as the research continues.

“At MBFi, our research is driven by a commitment to developing innovative Green Chemistry solutions that address real-world agricultural challenges. Advancing new technologies requires significant scientific research, testing, and investment, often with no guarantee of success. Having these efforts recognized through the Research & Development tax incentive provides valuable support, enabling us to continue pushing the boundaries of agricultural innovation and delivering practical solutions that benefit growers.” 

 – Charisse Henning, Operations Director, MBFi

The Research

Section 11D of the Income Tax Act applies to work that sets out to resolve genuine scientific or technological uncertainty, where the answer cannot be deduced by a competent professional from what is already known. The harder question is where the line falls between that and ordinary product development, since the two look similar from the outside. A finished product that a farmer can buy is a commercial outcome. The research is the work that resolves the unknowns to get there, and only that part qualifies.

Take a low-toxicity active with no field-control data behind it, or a bacterial strain whose behaviour in local soils is unknown. Neither can be developed from what is already established. The outcome must be found through systematic investigation, and that is what makes it genuine R&D.

MBFi’s qualifying R&D fell into two broad areas.

Crop protection chemistry

A large part of MBFi’s research concerns the products farmers apply to protect crops, and the adjuvants that govern how well they perform. Much of it involves active ingredients with no published field data behind them, so their behaviour on South African crops could only be established through testing, alongside the risk of crop damage built into every trial. A further layer of difficulty comes from combining chemical actives with living biological agents, where the compatibility between the two was not known in advance and had to be established through investigation rather than assumed. The work sits in territory where the answers were not known in advance.

Soil biology and nitrogen fixation

The second area is biological rather than chemical and concerns the bacteria that fix nitrogen for leguminous crops. MBFi identified new local strains showing behaviour distinct from existing commercial inoculants, with further work needed to confirm their novelty at a molecular level. The inoculants, seed coatings and biological fertilisers built around those strains each carried their own unknowns.

How Catalyst Solutions approached the work

When Catalyst Solutions began working with MBFi in 2022, the first task was to understand the research. Our technical team, consisting of scientists and engineers with the background to understand the chemistry and the biology, engaged directly with MBFi’s researchers to establish what each project set out to discover, where the uncertainty lay, and which activities met the Section 11D threshold. The financial analysis followed from it, with qualifying expenditure traced and supported based on work that genuinely qualified.

Catalyst Solutions mapped MBFi’s qualifying activities against the Section 11D criteria and prepared the technical narratives, then submitted the projects to the DSTI for pre-approval. Once approved, the expenditure analysis followed, tracing and supporting the qualifying costs behind each claim. The work was documented so that it could be explained and defended long after submission, which is the standard every claim is built on.

The engagement is ongoing. We continue to work with MBFi as their research develops, identifying new qualifying work and securing the tax benefit that comes with it.

The Outcome

MBFi’s research has returned R2.7 million in Section 11D tax benefits to date, on work that might otherwise have gone unclaimed. More than the figure, the value lies in having a complex, multi-disciplinary programme correctly recognised as qualifying research, documented so that it can be explained and defended years later, and structured so that the work continues to be captured as it happens.