December 2022
The tail end of 2022 has been eventful on the domestic front with National Treasury putting forward a new price path for carbon tax that will see a sharp increase in the carbon tax rate – which will reach the US$30 per ton CO2e mark by 2030.
This has sparked significant push-back from many in the organised business community, but the point is undeniable that, even at this new revised rate, South Africa still lags far behind the International Monetary Fund’s recommended rate of between USD 40-80/tCO2e by 2020 for the pricing to have a meaningful impact.
Whilst treasury has remained steadfast on their intent to increase the carbon tax rate, they have however indicated that the proposed removal of the many carbon tax allowances will now take place at a much slower pace, making the effective tax rate a matter of conjecture at this point. We will certainly be keeping a close eye on developments and sharing our thoughts around this across our platforms in 2023.
