Parliament Briefed on Draft Carbon Tax Bill

National Treasury

National treasury recently briefed parliament on the Draft Carbon Tax Bill.

The draft bill was published for comment in December 2017.

It was approved by cabinet in August 2017.

The draft bill seeks to:

•    provide for the imposition of a tax on the carbon dioxide (CO2) equivalent of greenhouse gas emissions; and
•    provide for matters connected therewith.

The draft bill flows from the Carbon Tax Discussion Paper in 2010, the 2013 Carbon Tax Policy Paper, and the 2014 Carbon Offsets Paper.

The bill will enable South Africa to meet its nationally-determined contribution commitments in terms of the 2015 Paris Agreement on Climate Change.

It will also facilitate reduction of the country’s greenhouse gas emissions in line with the National Climate Change Response Policy and National Development Plan.

The draft bill proposes a rate of carbon tax of R120 per ton carbon dioxide emissions.

In the briefing, treasury indicated that the tax would be introduced in a phased approach.

Initially, it would start off at a relatively modest rate, “coupled with generous tax free allowances, and adjusted over time to facilitate a structural transition to a low carbon, climate resilient economy in a cost effective manner.”

Meanwhile, the Division of Revenue Bill and the Appropriation Bill were tabled in parliament on budget day.

The Division of Revenue Bill provides for equitable division of revenue raised nationally among the
national, provincial and local spheres of government for the 2018/19 financial year, the determination of each province’s equitable share and allocations to provinces, local government and municipalities from national government’s equitable share and the responsibilities of all three spheres pursuant to such division and allocations.

The Appropriation Bill seeks to appropriate money from the National Revenue Fund for the requirements of the State for the 2018/19 financial year and to prescribe conditions for the spending of funds withdrawn for the 2019/20 financial year before the commencement of the Appropriation Act for the 2019/20 financial year.

Sabinet Cape Town Office

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