Carbon tax bill update


The Carbon Tax Bill provides for the imposition of a tax on the CO2 equivalent of greenhouse gas emissions and also amends the Customs and Excise Act to make provision for the administration and collection of carbon tax revenues as an environmental levy.

In the 2019 Budget Speech the Minister of Finance announced that Carbon Tax is scheduled to come into effect on 1 June 2019. On 29 March 2019 the Carbon Tax Bill [B46B-2018] was adopted and submitted to the President of the Republic of South Africa for assent by Parliament. To date the Carbon Tax Bill has not been signed into an Act of Parliament by the President.

The Carbon Tax Bill provides for the imposition of a tax on the carbon dioxide (CO2) equivalent of greenhouse gas emissions. The Carbon Tax Bill also amends the Customs and Excise Act, 1964 (Act No. 91 of 1964) so as to make provision for the administration and collection of carbon tax revenues as an environmental levy. In summary, the main features of the Carbon Tax Bill are as follows:

  • Persons subject to Carbon Tax (i.e. Taxpayer) are listed in the Schedule to the Bill (section 2);

  • The Tax Base for the Carbon Tax is set out in section 3 of the Bill;

  • Section 4 of the Bill imposes a R120 per ton carbon dioxide equivalent of the greenhouse gas emissions of a taxpayer;

  • The formula for the calculation of the amount of Carbon Tax payable by a taxpayer in respect of a tax period is set out in section 6;

  • Part II of the Bill provides for tax free allowances that must be taken into account for the purposes of determining the amount of carbon tax payable (up to 95 per cent allowances);

  • The Commissioner of the South African Revenue Service is the administrative authority on Carbon Tax liability assessment in terms of section 15; and

  • Section 17 of the Bill requires a taxpayer to submit yearly environmental levy accounts and payments for every tax period in accordance with the Customs and Excise Act, 1964.

Notwithstanding the above, for effective implementation of the Carbon Tax, the following regulations must still be published:

  • Performance allowance regulations;

  • Trade exposure allowance regulations; and

  • Carbon offsets regulations.