A carbon tax will come into effect from 2015, Finance Minister Pravin Gordhan announced in Parliament during the tabling of his Budget Speech on 27 February 2013. “Government proposed to price carbon by way of a carbon tax, at the rate of R120 per tonne of carbon dioxide equivalent, from 1January 2015,” said Gordhan.

Addressing the National Assembly, he said the impact of the planned carbon tax would be lessened by a tax-free exemption threshold of 60%, “with additional allowances for emissions intensive and trade-exposed industries”. An updated carbon tax policy paper is to be published at the end of April 2013.

According to the 2013 Budget Review, the basic tax-free threshold of 60% will apply during the first phase of the implementation of carbon tax – from 2015 to 2020.

The review also highlighted that a gradual phasing out of the electricity levy is under consideration, to occur as the carbon tax is phased in.

Environmental taxes unpacked

Further environmental taxes highlighted in the 2013 Budget include fuel levies, which are set to increase by 23 cents a litre from 3April  2013. The date will also see the general fuel levy rise by 15 cents a litre, to R2.13, while the Road Accident Fund levy – not strictly an environmental tax – will increase by eight cents a litre, to 96 cents a litre of petrol.

Additionally, the levy on plastic shopping bags will rise from four cents to six cents a bag from 1April and the levy on incandescent light bulbs, which was introduced in 2009, will increase from R3 to R4 a bulb from the same date.

The tax on motor vehicle carbon dioxide emissions – aimed at encouraging the purchase of vehicles with lower emissions standards – is also set to rise from 1April  with the emissions tax on passenger cars rising from R75 to R90 for every gramme of emissions per kilometre above 120 g CO₂/km. Double-cab vehicles will experience an increase from R100 to R125.

Gordhan further noted that rules on tax incentives that encourage biodiversity management are to be modified,

The 2013 Budget Review further proposed incentives to support the development of a local biofuels industry. “As in other countries, a fiscal incentive is required to overcome the initial capital cost hurdles and offset risks.” The initial cost of the incentive “will be 3.5 cents a litre to four cents a litre of petrol or diesel, recovered through a levy included in the monthly price determination”.