NEWS
Revised Carbon Tax Bill
introduced to parliament
After more than eight years in the making, the carbon tax is
expected to take effect in 2019.
T
he revised Carbon Tax Bill (Bill) was
recently introduced to parliament by
the minister of finance. The Bill
considers feedback received during the
parliamentary hearings on the December
2017 draft Bill that took place in 2018.
“The Bill aims to give effect to South
Africa’s objectives and commitments to
reduce greenhouse gas (GHG) emissions
under the National Climate Change
Response Policy and the Paris Agreement,
respectively,” highlights Garyn Rapson,
partner at Webber Wentzel.
Rapson notes that a person (which
includes a partnership, trust, municipal
entity and public entity) who conducts any
of the activities listed under Schedule 2 of
the Bill is liable to pay carbon tax on GHG
emissions which exceed the prescribed
thresholds for those activities. A range of
activities in sectors including energy,
industrial processing and waste are listed.
“The rate of carbon tax on GHG emissions
will be imposed at an amount of R120 per
ton carbon dioxide equivalent of the GHG
emissions. This rate must, however, be
increased each year by the amount of
consumer price inflation (CPI) plus 2% up to
31 December 2022, and adjustments in line
with inflation thereafter,” Rapson explains.
The Bill provides for various tax-free
‘allowances’, which enable a reduction in
carbon tax liability of up to 95% for certain
activities. These allowances provide a large
degree of flexibility for taxpayers to
significantly reduce their carbon tax liability.
Taxpayers must submit environmental levy
accounts and payments as prescribed in
terms of the Customs and Excise Act, 1964
on an annual basis for every tax period.
“You are encouraged to take steps now to
understand your company's impending
carbon tax liability and how this liability can
be minimised,” urges Rapson.
Published for comment on 12 November
2018, the draft carbon offset regulations
govern the carbon offset allowance
mechanism that is provided in terms of the
“
You are encouraged
to take steps now to
understand your company's
impending carbon tax
liability and how this liability
can be minimised ”
Bill. This mechanism enables companies to
reduce their carbon tax liability by investing
in GHG emission reduction projects. “We
expect that these regulations will be
published in final form on 1 June 2019 to
coincide with the commencement of the
carbon tax,” says Rapson.
The carbon tax will be implemented in a
phased approach with the first phase
running until 31 December 2022 and the
second phase from 2023 to 2030. According
to National Treasury, the introduction of
the carbon tax in the first phase is not
expected to have an impact on the price
of electricity.