National Treasury has announced the postponement of the implementation of the environmental tyre levy to 1 February next year. This is subsequent to the Budget 2016 presentation, where the Minister of Finance announced that an environmental levy on tyres will become effective from 1 October 2016 (next month).

Once the environmental tyre levy is implemented the prescribed levy of R2.30 a kilogram excluding VAT will be paid to the South African Revenue Service (SARS) instead of directly to Redisa.

Minister Pravin Gordhan has decided on the postponement to allow SARS further consultation with all affected parties to allow for the practical arrangements.

Levy objectives

The objectives of this initiative are to encourage waste reduction, reuse, treatment and recycling and reduce disposal into landfills. Treasury says that it will also help in government’s broader efforts to promote greater levels of transparency and accountability.

According to the draft legislation, the tyre levy will be applied at a rate of R2.30 per kg of tyre and implemented through the Customs and Excise Act. SARS will be responsible for the collection of revenues, as with all other environmentally related taxes. Revenues from the levy will be deposited into the National Revenue Fund, and an on-budget allocation will be made available through the budget of the Department of Environmental Affairs.

Ensuring transparency

Treasury added “this will ensure a more robust and transparent revenue collection and funding mechanism. The principle of extended producer responsibility will be encouraged and all producers and importers of tyres will be required to fully participate in the implementation process.”