The Draft Carbon Tax Bill
The proposal for a carbon tax in South Africa was first made in 2007. After lengthy public consultation processes and debates, the National Treasury introduced the Carbon Tax Bill in 2015. The implementation of the Bill has been delayed numerous times. It was set to come into effect during 2017, but it is likely that further delays might ensue.
The Bill is designed to encourage emission-reduction activities in certain sectors, through placing a price on carbon. This price on carbon acts as a signal that incentivizes behavioral change and makes emission reduction projects more attractive. The planned carbon tax is aimed at achieving South Africa’s ambitious Paris Agreement commitments to reduce GHG emissions by 34% by 2020 and 42% by 2025.
It is anticipated that the carbon tax will come into effect in a phased manner at a marginal rate of R120 per ton CO2 emissions. Persons who conduct various activities in the manufacturing, construction, mining and transport sectors will be affected. It will likely be implemented with complementary measures, for example a reduction in the electricity levy, and carbon offsets which firms can use to reduce their carbon tax liability.
The Carbon Tax Discussion Paper can be read at: http://www.treasury.gov.za/public%20comments/Discussion%20Paper%20Carbon%20Taxes%2081210.pdf
The Draft Carbon Tax Bill is available at: http://www.treasury.gov.za/public%20comments/CarbonTaxBill2015/Carbon%20Tax%20Bill%20final%20for%20release%20for%20comment.pdf