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South Africa: Possible tax on single-use plastics

South Africa: Possible tax on single-use plastics

South Africa’s government is considering a new tax on single-use plastics—items that are used only once before they are thrown away or recycled such as straws, coffee stirrers, water bottles, and most food packaging.

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The National Treasury is expected to release later this year an environmental fiscal reform policy paper that would outline options to reform existing environmental taxes to broaden their coverage and to consider the role that new taxes can play in addressing air pollution and climate change, promoting efficient water use, reducing waste, and encouraging improvements in waste management.

A possible tax on single-use plastics was announced in the 2019 budget speech, and the objective would be to reduce the use of these items and encourage recycling. There has been no information concerning the quantum or effective date of a possible tax on single-use plastics. Because of South Africa’s heavy reliance on single-use plastics, a tax may be viewed as a more realistic option than a complete ban on plastic products. However, there are concerns that a tax on single-use plastics (which would not be “ring-fenced” but would be pooled in a manner similar to the plastic bag levy imposed in 2004) would do little to change behaviour and put an end to plastic pollution. 

KPMG observation

There are reports that the announcement of the single-use plastics tax in South Africa has not been well received, considering in part the carbon tax—a substantial environmental tax imposed on corporate South Africa. Read TaxNewsFlash

It is unclear whether a tax on single-use plastics would curb the use of these products, given that the Department of Environment, Forestry and Fisheries has acknowledged that consumers have continued to use plastic bags despite the plastic bag levy quadrupling between 2004 and 2018. According to statistics reported by the South African Revenue Service at the end of 2018, the revenue brought in by the sale of plastic bags under the plastic bags tax increased by R9 million to R242 million for the year.


Read a July 2019 report [PDF 112 KB] prepared by the KPMG member firm in South Africa

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