Finance Minister Tito Mboweni introduced the Carbon Tax Bill in the National Assembly on Tuesday, marking the culmination of an eight-year process of preparation and consultation with stakeholders.
The tax is due to take effect from June 1 2019, and while parliament’s finance committee expects to process the bill before the end of the year, it does not envisage voting on it before parliament rises in early December for the recess.
A number of tax-free allowances will apply during the first phase of the carbon tax and will be capped at 95%. An initial headline tax rate of R120 per tonne of carbon dioxide equivalent, and various tax-free allowances, will result in an effective tax rate that will vary between R6 and R48 per tonne.
Mboweni said in his speech introducing the bill that it would benefit all South Africans and was SA’s contribution to the world.
“Climate change poses the greatest threat to humanity and SA intends to play its role in the world as part of the global efforts to reduce greenhouse gas emissions. This enables SA to be considered among the positive nations of the world.”
He noted that the process of preparing the bill dated back to 2010 when the carbon tax discussion paper was published. This was followed in 2013 by the carbon tax policy paper; the 2014 carbon offsets paper; the 2015 carbon tax bill; and the 2016 draft regulation on carbon offsets.
