Finance Minister Tito Mboweni says South Africa will play its role in the global effort to reduce greenhouse gas emissions and the Carbon Tax Bill will help the country do it.
Mboweni made the statement while tabling the Carbon Tax Bill in parliament last week noting that climate change is the greatest threat facing humankind, and South Africa intends to play its role.
According to National Treasury the Carbon Tax Bill and related measures will enable South Africa to meet its targets as agreed in the Paris Agreement.
The revised Bill takes into account comments received during the Parliamentary hearings convened by the Standing Committee of Finance earlier this year, following publication of the draft Bill in December 2017.
Tax subject to reviews
Cabinet adopted the Carbon Tax Bill in August 2017, noting the bill as an integral part of the system for implementing government policy on climate change.
National Treasury notes that the impact of the tax, which will become effective from 1 June 2019, will be reviewed after at least three years of implementation and will take into account the progress made to reduce GHG emissions, in line with our National determined contributions commitments.
“Future changes to rates and tax-free thresholds in the Carbon Tax will follow after the review, and be subject to the normal transparent and consultative processes for all tax legislation, after any appropriate Budget announcements by the Minister of Finance,” National Treasury explains.
Cushioning the blow
The tax, the department notes, will be implemented in a phased manner and will take into account the country’s NDC commitments to reduce greenhouse gas emissions.
It will also feature a package of tax incentives and revenue recycling measures to minimise the impact in the first phase of the policy.