SA WOULD implement a carbon tax in the 2013-14 tax year, according to the Treasury's budget review document.

South Africans were probably paying about R10bn a year in unofficial "carbon taxes" such as the levies on vehicle emissions, electricity and fuel, Deloitte sustainability and climate-change director Duane Newman said.

"Carbon" has become the catchword for all so-called greenhouse gases, linked to climate change. The Treasury is to release a second draft policy paper on a carbon tax this year.

The proposals included a tax-free threshold of 60% (with concessions for process emissions and trade-exposed sectors) and maximum offset percentages of 5%-10% until 2019-20.

A carbon tax rate of R120 a ton of carbon dioxide equivalent above the thresholds is proposed to take effect during 2013-14, with increases of 10% per year until 2019-20. Revenue will not be earmarked or ring-fenced, but consideration will be given to environmental concerns.

Mr Newman said while the mechanics of the tax were up for discussion, the detail in the review gave a "clear price signal".

The proposed tax included percentage-based exemption thresholds rather than thresholds based on absolute emissions; a higher threshold for process emission with consideration given to the limitations of the cement, iron and steel, aluminium and glass sectors to mitigate emissions over the near term; additional relief for trade-exposed sectors; the use of offsets by companies to reduce their carbon-tax liability; and phased implementation.

Democratic Alliance water and environmental affairs spokesman Gareth Morgan said the Treasury was correct to "hold back" on a carbon tax. "Many businesses and consumers would not be able to absorb this tax under the current economic climate," he said.

Imbewu Sustainability Legal Specialists director Andrew Guilder found it "interesting" that Mr Gordhan had not closed the door on an emissions trading scheme, which several commentators said would be more appropriate than the proposed carbon tax.

With I-NET BRIDGE