Get ready for carbon tax, industrial polluters

The implementation of the first phase of the carbon tax is two months away and experts have warned industrial polluters to be ready.

Minister of Finance Tito Mboweni announced the introduction of carbon tax during his maiden budget speech this year.

The minister, who has proven to be a tax hawk with his “pay up, there is nothing for mahala [free]” slogan, announced the phasing in of carbon tax in different stages. His principle is, the more you emit the more you pay.

To give effect to SA’s commitment to reduce greenhouse gas (GHG) emissions, Mboweni introduced the revised Carbon Tax Bill to parliament. The legislation was a sequel to public hearings at the beginning of this year.

According to Gillian Niven and Nirvasha Singh, partners at Johannesburg-based law firm Webber Wentzel, the Bill aimed to give effect to SA’s objectives and commitments to reduce GHG emissions under the National Climate Change Response Policy and the Paris Agreement respectively.

The experts highlighted the first phase would run from June 1 until December 31, 2022, and the second phase from 2023 to 2030. The rate of carbon tax will be imposed at an amount of R120 per ton of carbon dioxide equivalent.

“This rate must, however, be increased each year by the amount of consumer price inflation (CPI) plus 2% up to December 31, 2022, and adjustments in line with inflation thereafter,” Niven and Singh wrote in a joint article.

However, the Bill provides for various tax-free “allowances”, which enable a reduction in carbon tax liability of up to 95%.

“These allowances provide a large degree of flexibility for taxpayers to significantly reduce their carbon tax liability; and 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.”

The Congress of the South African Trade Unions (Cosatu) welcomed it, saying taxes were one tool in changing consumer and industrial behaviour.

“We recognise that carbon pricing and taxes and a transition to a low carbon emissions economy will soon become a requirement if we are to continue to export our products to the European Union (EU), our largest trading partner.

“Our economy cannot afford to lose the EU market for our exports,” said Cosatu’s parliamentary coordinator Matthew Parks.

However, Parks said Cosatu did not agree with “profits-at-all-costs polluters”, which sought to deny the reality of climate change and its devastating impact upon working-class communities.

“We need look no further than the drought in the Cape, acid mine water in Gauteng, desertification in the Karoo, pollution-caused deaths in Mpumalanga and Limpopo, and the cataclysmic flooding in Mozambique, Malawi and Zimbabwe to see that climate change is … killing our people.

“Industry, consumers, society must change.

“A just transition must happen now, but it must not and does not need to result in workers being thrown into the scrap heap of unemployment,” Parks said.

– ericn@citizen.co.za

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