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.
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.
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.
The KPMG logo and name are trademarks of KPMG International. KPMG International is a Swiss cooperative that serves as a coordinating entity for a network of independent member firms. KPMG International provides no audit or other client services. Such services are provided solely by member firms in their respective geographic areas. KPMG International and its member firms are legally distinct and separate entities. They are not and nothing contained herein shall be construed to place these entities in the relationship of parents, subsidiaries, agents, partners, or joint venturers. No member firm has any authority (actual, apparent, implied or otherwise) to obligate or bind KPMG International or any member firm in any manner whatsoever. The information contained in herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavor to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act on such information without appropriate professional advice after a thorough examination of the particular situation. For more information, contact KPMG's Federal Tax Legislative and Regulatory Services Group at: + 1 202 533 4366, 1801 K Street NW, Washington, DC 20006.