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South Africa: Carbon tax legislation, update

South Africa: Carbon tax legislation, update

A second draft of a carbon tax bill has been released for public comment and introduced in Parliament. The second draft version of the bill generally follows the first version (published in 2015), but reflects a few changes that take into account certain public comments.


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Among the provisions of the second draft version of the carbon tax bill are the following:

  • The actual date of implementing the carbon tax would be determined by a separate process, to be announced by the Minister of Finance in the budget for 2018 or 2019.
  • 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.
  • Only entities with total installed capacity for an activity that is equal to or above the indicated threshold (mostly a total installed thermal capacity of 10MW) would be required to report their emissions and would be subject to the tax in the first phase (up to 2022).
  • The tax rate would increase with inflation plus two percentage points until 2022, and then afterwards, at the rate of inflation.
  • The carbon tax would be deductible for income tax purposes to the extent that it forms part of a company’s business expense.
  • The Department of Environmental Affairs would collect the emissions data that would form the tax base.  
  • The South African Revenue Service (SARS) would be responsible for tax assessments. 


Read a February 2018 report [PDF 73 KB] prepared by the KPMG member firm in South Africa

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