South Africa: Update on carbon tax

Announcements concerning the second phase are scheduled to be made in the 2022 budget.

Announcements concerning the second phase are scheduled to be made in the 2022 budget.

Phase one of the carbon tax law in South Africa (the “Carbon Tax Act No. 15 of 2019”)—scheduled to end 31 December 2022—was introduced to address measures that the government is taking to meet its nationally determined contribution in terms of the 2015 Paris Agreement on climate change.

While the carbon tax includes a phased-in approach, there are many unanswered questions regarding the financial implications of the tax for phase two (1 January 2023 through 31 December 2030). The reason for this uncertainty is due to the planned review of the carbon tax “after at least three years implementation.” The review will consider the progress made in reducing greenhouse gas emissions.

The Minister of Finance on 11 November 2021 provided no details regarding how the carbon tax will be structured in phase two. However, announcements concerning the second phase are scheduled to be made in the 2022 budget.

Read a November 2021 report [PDF 255 KB] prepared by the KPMG member firm in South Africa

 

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