South Africa: Carbon tax registrations and possible effect of coronavirus (COVID-19)

South Africa: Carbon tax registrations

The carbon tax has been effective since 1 June 2019, but there has been a lag in the South African Revenue Service accepting registrations, and the unexpected implications of the coronavirus (COVID-19) pandemic has added to taxpayers’ concerns that they will not be able to timely register for this new tax.


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Carbon tax registrations

The carbon tax is administered in terms of the Customs and Excise Act, No 91 of 1964 (“C&E Act”) as an environmental levy on carbon emissions, which requires that every person operating emissions-generation facilities at a combined capacity equal to or above the legislated carbon tax threshold, must register with the South African Revenue Service and obtain a consolidated license for the combination of emissions facilities that generate emissions subject to the carbon tax. The emission facilities will be licensed as a “customs and excise manufacturing warehouse”.

In March 2020, the tax authority announced that its branches started accepting applications for registration for carbon tax, given that the requisite training of officials has been completed.

Many companies have collated the necessary application documents well before March 2020 in order to meet their obligations for the carbon tax. Amid concerns that collated and submitted documents may no longer be valid once they are actually processed (due to certain requirements), the South African Revenue Service has indicated that the date of submission of documents secures the status, rather than the date of approval. Therefore, if the application and approval process takes longer than three months, the tax authority will not require that companies resubmit their documents. 

Implications of COVID-19

Following the outbreak of COVID-19 in South Africa, the South African Revenue Service on 17 March 2020 issued a media statement stating that the tax authority will be adhering to strict social distancing guidelines, which include discouraging taxpayers from going into branches and advising that online digital channels be used instead. While these measures are in place, if taxpayers are still required to visit a South African Revenue Service branch, “strict adherence to social distancing and general hygiene practices will be applied”.

South African Revenue Service officials have confirmed that they are (as of 23 March 2020) still accepting manual applications.

Read a March 2020 report [PDF 114 KB] prepared by the KPMG member firm in South Africa  

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