The South African Parliament has received the revised and updated Carbon Tax Bill from the Minister of Finance, Tito Mboweni. The Bill aims to improve the country’s commitment to reducing greenhouse gas emissions and speed up the achievement of the goals as outlined in the Paris Agreement and the National Climate Change Response Policy.
The Carbon Tax Bill is expected to be approved and introduced by 1 June 2019. It will allow the government to place a tax on carbon emissions; those individuals, businesses, municipal entities and public organisations that produce a large amount of greenhouse gas emissions, such as factories and coal-burning operations, will be taxed the most.
Any person or entity that exceeds the prescribed threshold for greenhouse gas emissions will be liable to pay carbon tax. The Bill lists a number of activities and operations that will likely be affected by its introduction, including energy production, industrial manufacturing and waste management.
Carbon tax will be phased in
This carbon tax will be phased into law over a period of 11 years. The first phase will run from 1 June 2019 to 31 December 2022 – provided the Bill is approved by Parliament on time. The National Treasury insists that the introduction of the carbon tax during the first phase will not have an impact on the price of electricity for citizens.
The proposed tax rate for greenhouse gas emissions is currently stipulated at R120 per tonne of carbon dioxide produced. The rate will be increased every year to match the national inflation rate plus two percent until 31 December 2022. Thereafter, it will be adjusted in line with the inflation rate.
Carbon tax allowances and reduction
The Carbon Tax Bill also outlines a number of tax-free allowances that enable certain qualifying entities to reduce their tax liability by up to 95%. These allowances provide an opportunity for certain non-governmental organisations, healthcare facilities and businesses that meet the criteria to have a large degree of flexibility and reduce their carbon tax.
Businesses can also reduce their carbon tax liability by investing in emission-reducing technologies and chimney filters that capture carbon dioxide from exhausts and fumes. Taxpayers are required to submit environmental levy accounts and payments every tax period, in terms of the Customs and Excise Act (1964).
Averda is a leading waste management provider with over 50 years of experience across three continents. Through growth, transformation and engagement, we strive to find new ways of managing waste while protecting the community and environment.
By pairing international expertise with local insights, we have secured our position as one of South Africa’s most respected providers of waste management and industrial cleaning services. We also operate in the recycling, pipe inspection, CCTV, infrastructure inspection, hydro-demolition, high-pressure water jetting and catalyst handling industries.
Follow us on Facebook, Twitter and LinkedIn for the best tips on recycling and the latest industry news. See our Instagram and YouTube channels for more insights into environmental affairs and our work with local communities.