Carbon Tax Interim Report Released for Comment

Davis Tax Committee

The Davis Tax Committee (DTC) has released its first interim report on carbon tax for comment.

According to a statement, the DTC took 45 written and oral submissions into account when drawing up the report.

A second report will follow once all comments have been received and considered.

The interim report focuses on the design aspects of the tax, the appropriate time for introduction, alignment between the carbon budget and carbon tax and the implications of the proposed tax for key sectors such as the electricity sector.

Issues covered in the report include greenhouse gases and climate change, policies for the control of greenhouse gas emissions, assessment of the treasury carbon tax proposal and recommendations.

The report is available at www.taxcom.org.za.

Written comment is invited until 31 January 2016.

It can be emailed to taxcom@sars.gov.za.

Meanwhile, national treasury has briefed the standing committee on finance on the Financial Sector Regulation Bill.

The bill was tabled at the end of October 2015.

It aims to put a twin peaks model of financial sector regulation in place in South Africa.

The twin peaks model will see the Financial Services Board overseeing market conduct while the Reserve Bank will take responsibility for prudential regulation.

The proposed legislation calls on the Reserve Bank to “promote and maintain financial stability within an agreed policy framework”.

The bill also wants a Council of Financial Regulators to be set up to ensure cooperation between the twin peaks regulators and other financial sector-related regulators.

A Financial Services Tribunal is also on the cards to deal with appeals.

The bill will put a single regulatory system in place thereby significantly reducing the potential for regulatory arbitrage or forum shopping.

According to an earlier statement issued by treasury, the proposed legislation seeks to make the local financial sector safer by reducing potential threats to financial stability and ensuring that financial institutions treat their customers fairly.

During the briefing, treasury emphasised that the bill aims to ensure that local financial sector regulation is aligned with international best practice.

The plan is to have the two regulatory bodies in place by the middle of 2016.

In a separate matter, the Reserve Bank has designated, in Gazette 39411, that the International Finance Corporation (IFC) is an institution whose activities do not fall within the meaning of a “business of a bank” as defined in the Banks Act.

This means that the IFC may not take deposits from the general public, debt securities can only be issued to institutional investors in South Africa and it will be classified as a foreign issuer with all issues to be in Rands.

Sabinet Cape Town Office

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