Last Call for Comment on Carbon Tax Policy

National Treasury

The updated Carbon Tax Policy Paper entitled “Reducing greenhouse gas emissions and facilitating the transition to a green economy” has been published for comment.

According to a national treasury statement, this is the second and final call for comment on the policy proposals before a draft bill is drawn up.

The plan is for carbon taxes to be implemented from 2015.

The latest policy paper includes input from the previous round of public comment.

A discussion paper entitled “Reducing Greenhouse Gas Emissions: The Carbon Tax Option” was published for comment in 2010.

The latest version stresses that the intention behind carbon taxes is to change behaviour rather than to raise additional revenue.

Carbon taxes will be implemented in a phased manner.

“The first phase (introductory) will be for five years, effective from 1 January 2015 to 31 December 2019 followed by Phase 2 of another five years, from 2020 to 2025. Follow up phases can be explored at a later stage”.

Initially a tax rate of R120 per ton of CO2e will be implemented.

This will increase at 10 per cent per annum.

60% of actual emissions will not be taxed in the beginning to help soften the blow.

This will mean that the effective tax rate will range between R12 and R48 per ton of CO2e during the initial phase.

During the first phase the agricultural and waste sectors will be exempt.

 A tax free threshold of up to 70% will also apply in the electricity sector.

The statement also reveals that energy efficiency tax incentive regulations will be published in the Government Gazette within the next two weeks.

Written comment is invited until 2 August 2013.

Comment can be emailed to

The paper can be viewed at

Sabinet Cape Town Office

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