On 14 December 2017, the National Treasury was published the 2nd draft of the Carbon Tax Bill for public comment and presented in Parliament. The version of the second draft law is generally follows the first version (published in 2015) but reflects some changes that take into account specific public comments.
The actual implementation date of the carbon tax will be set out in a separate Finance Minister’s report, which will be published in 2018 or 2019 Budget, depending on the economy of the State. The rate of tax would remain at R120 per ton of CO2e, with an effective carbon tax rate initially ranging between R6 to R48 per ton of CO2e. The tax rate would increase inflation by two percentage points by 2022, and then after inflation.
The carbon tax would be deductible for income tax purposes in so far as it is part of the company’s business costs. Companies requiring a total installation capacity equal to or above a specified limit (with a maximum total thermal capacity of 10 MW) would be required to be notified of their emissions and would be subject to tax in the first phase (until 2022). The South African Revenue Service (SARS) would be responsible for tax assessments.
