Treasury to introduce carbon tax, effective from 2015 — Gordhan
FINANCE Minister Pravin Gordhan on Wednesday in his budget speech in Parliament announced the introduction of a carbon tax to mitigate the effects of climate change.
It will be introduced at the rate of R120 per ton of carbon-dioxide equivalent effective from January 1 2015.
According to the Treasury, an updated policy paper will be published by the end of March for further comment and consultation.
"The energy-efficiency savings tax incentive will help companies to reduce their energy intensity and the country’s level of carbon-dioxide emissions," said the budget review document.
"Some of the revenues generated through the carbon tax will be recycled to fund the energy-efficiency savings tax incentive. A gradual phasing out of the electricity levy, as the carbon tax is phased in, is also being considered."
During the first phase of implementation a basic tax-free threshold of 60% has been proposed, as well as offset percentages of 5%-10%, to allow emission-intensive and trade-exposed industries to invest in projects outside their normal operations to help reduce their carbon-tax liabilities.
Meanwhile, emission tax has also been increased for passenger vehicles. With effect from April 1, emissions tax for passenger vehicles will rise to R90 from R75 for every gram of emissions per kilometre above 120g of carbon dioxide per kilometre. In the case of double cabs, it will rise to R125 from R100 for every gram per kilometre in excess of 175g of carbon dioxide per kilometre.
In a related move, the Treasury said government will from April 1 increase the levy on plastic shopping bags by 50% to 6c/bag from the current 4c/bag. The environmental levy on incandescent light bulbs will increase to R4 per bulb from the current R3 per bulb.