South African Carbon Tax

What is Carbon Tax?

South Africa recognises the importance of creating a framework for the transition to an environmentally sustainable, low-carbon economy. As such, the country is currently designing a suite of climate-change mitigation measures to reduce GHG emissions. The most notable of these measures is the proposed national carbon tax, set to be implemented by National Treasury in 2016.

According to the draft policy paper that was released for public comment in May 2013, South Africans will be taxed only on direct emissions at a rate of R 120 per tCO2e emitted, which will escalate at 10% per annum over the following five years. A tax free-threshold of 60% has been incorporated into the proposed design, which can be increased to 90% (through the access of relief mechanisms). The regulation aims to include relief mechanisms to protect both vulnerable business sectors and the competitive position of industry within South Africa. This means that the effective tax rate could range between R 12/tCO2e and R 48/tCO2e. At present, relief mechanisms are still under review and are only available for direct (scope 1) emissions. Government alluded to an announcement of the carbon tax bill and design towards the end of 2015.

Promethium Carbon’s service

Promethium Carbon will calculate your organisation’s exposure to the Carbon Tax, and advise you on ways to mitigate your tax liability by means of relief measures.