THE CARBON TAX BILL December 2017
National Treasury published the second draft of the Carbon Tax Bill on 14 December 2017. A revised Bill is expected to be formally tabled in Parliament by mid-2018.
The actual date of the implementation of the Carbon Tax will be announced during 2018, or at the Budget in 2019.
National Treasury has indicated that this will be done whilst taking into account the state of the economy, and it aims to minimise the impact of the policy in the first phase.
The first phase of the Carbon Tax has been extended and will be up to 31 December 2022.
The second draft of the Bill is a revision of the first draft, which has taken into account comments received from various stakeholders.
Essentially the design of the Carbon Tax remains the same. The main changes to the draft Bill are:
- The Carbon Tax rate remains R120/ton CO2e - to increase annually by the rate of inflation plus 2% until 31 December 2022, and the rate of inflation thereafter.
- The trade exposure allowance is changed to a sector level.
- Certain renewable energy projects under the REIPPPP programme can be used as offsets.
- The Carbon Tax will be tax deductible.
- A revenue recycling model is proposed
- Treasury is considering a pass-through mechanism for liquid fuels.
- National Treasury has provided a response document to all the written submissions, providing clarifications where possible as well as the amendment to the Draft Bill.
Stakeholders have been invited to submit written comments on the Draft Carbon Tax Bill by close of business on 9 March 2018.
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