The Minister of Finance tabled the Carbon Tax Bill in Parliament on 20 November 2018, giving effect to the announcements made in the 2017 and 2018 Budget and by the Minister in his MTBPS speech in October. In tabling the bill, the Minister stated that “climate change poses the greatest threat facing humankind, and South Africa intends to play its role in the world as part of the global effort to reduce greenhouse gas emissions”. The Carbon Tax Bill, and related measures, will enable South Africa to meet its targets as agreed in the Paris Agreement.
The revised Bill takes into account comments received during the Parliamentary hearings convened by the Standing Committee of Finance earlier this year, following publication of the draft Bill in December 2017. Cabinet adopted the Carbon Tax Bill in August 2017, noting the bill as an integral part of the system for implementing government policy on climate change.
The Carbon Tax Bill gives effect to the polluter pays principle and aims to price greenhouse gas emissions by obliging the polluter to internalise the external costs of emitting carbon and contribute towards addressing the harm caused by such pollution.
As announced in the 2018 MTBPS, the carbon tax will become effective from 1 June 2019. A review of the impact of the tax will be conducted after at least three years of implementation of the tax and will take into account the progress made to reduce GHG emissions, in line with our NDC Commitments. Future changes to rates and tax-free thresholds in the Carbon Tax will follow after the review and will be subject to the normal transparent and consultative processes for all tax legislation, after any appropriate Budget announcements by the Minister of Finance.
We will review the carbon tax bill and advise on implications prior to implementation in 2019.