The implantation of Carbon Tax has been postponed by six months from 1 January 2019 to 1 June 2019 says Finance Minister Tito Mboweni.
Tabling the Medium Term Budget Policy Statement in the National Assembly on Wednesday the Minister said that government took the decision to postpone the implementation of the Carbon after hearing the concerns of business and labour during Parliamentary hearings.
“The carbon budgeting system and the carbon tax will be aligned. This is done by imposing a higher tax rate as a penalty for emissions exceeding the carbon budget. The original date of implementation was 1 January 2019, but this will be postponed to 1 June 2019,” Mboweni noted.
Working for the Paris Agreement
The Carbon Tax will enable South Africa to meet its nationally-determined contribution (NDC) commitments in terms of the 2015 Paris Agreement on Climate Change, and to reduce the country’s greenhouse gas emissions in line with the National Climate Change Response Policy and National Development Plan.
South Africa ratified the Paris Agreement in November 2016 and endorsed its NDC, which requires that its greenhouse gas (GHG) emissions peak in 2020 to 2025, plateau for a ten-year period from 2025 to 2035 and decline from 2036 onwards.
The impact of the tax in the first phase is designed to be revenue-neutral in terms of its aggregated impact, when assessed together with the complementary tax incentives and revenue recycling measures.
Beyond the first phase, a review of the impact of the tax after at least three years’ implementation will be conducted. The review will take into account the progress made to reduce GHG emissions, in line with our NDC commitments.