Carbon tax in South Africa set for mid-2016 introduction
Implementation of carbon tax in South Africa was set for mid-2016, said National Treasury chief director of economic tax analysis Cecil Morden on Thursday. “We are currently busy with the legislation, and hope to have it out within the next month or two. We are nearly there,” he told the Transport Forum, in Johannesburg.
Morden said South Africa was not “running ahead” of the world with the legislation, but “following”, with similar tax regimes implemented in countries like Chile and Mexico. “The carbon tax is a proposed [tax at] R120 per ton of carbon dioxide emissions, which is today slightly less than $10.
“As an emerging economy we are taking it slowly. We have significant tax-free thresholds. We have a basic tax-free threshold of 60%, so you only pay 40% of the R120. We will revisit this in five, six years’ time.”
Economist Mike Schussler was highly critical of a carbon tax in South Africa because it would not be ring-fenced to “help the environment”, but would go into the general State coffers. He said South Africans and South African companies already carried a high tax burden. The mining industry, which would have to pay carbon tax, faced severe challenges as the price of platinum, coal, gold and iron-ore had more than halved from four years ago. This industry also battled labour unrest and erratic power supply.
Schussler also questioned why government was building new coal-fired power stations if it was “genuinely trying to create carbon-efficiency”.