DESPERATE calls by heavy industries for the government to abandon the introduction of carbon tax will not be heeded.
Industry bodies such as the Steel and Engineering Industries Federation (Seifsa) has pleaded for the tax plans to be repealed in the interest of the ailing economy.
Seifsa said industrial leaders are already suffering from high electricity, fuel and ports costs and said the added burden would result in more job losses.
But companies are now only one step closer to paying for their carbon emissions with the first tax period set to commence on 1 January 2017 and ending on 31 December that year.
Garlicke & Bousfield Attorneys Director Graeme Palmer said industries need to prepare to pay a rate of R120 per ton of CO2.
Treasury has published the Draft Carbon Tax Bill for public comment with the deadline on Tuesday.
‘The Bill adopts a gradual approach by phasing in the tax, and thus recognising the developmental challenges that face South Africa and also international climate policy considerations,’ said Palmer.
‘The carbon tax will apply to all sectors except agriculture and forestry.
‘Companies engaged in activities that produce greenhouse gas emissions will be liable for the tax and will be required to submit a tax return to the South African Revenue Service (SARS) based on their own assessment of emissions.’
Tax-free allowances
However, Palmer said to moderate the impact of the tax, there are a number of tax-free allowances that will apply during the first phase.
These allowances range from between 60% and 95% and may have the effect of reducing the carbon tax rate to a range of between R6 and R48 per ton of CO2.
‘A deduction for emissions from the use of liquid fuels (petrol and diesel) in stationary processes will be allowed to avoid double taxation, as the tax on these fuels will be imposed at source as an addition to the current fuel taxes.
‘The drafters of the Bill have also provided for ‘impermissible’ tax avoidance arrangements.
‘SARS will be responsible for administering the tax but will be assisted by the Department of Environmental Affairs.
‘It will be treated in the same manner as an environmental levy,’ Palmer said.
