- Treasury to publish proposed law for comment this month
- Companies say the tax is unaffordable, may curb investment
South Africa is forging ahead with plans to impose a carbon tax to help reduce emissions, boosting costs for the nation’s biggest polluters such as Eskom Holdings SOC Ltd. and Sasol Ltd.
Finance Minister Nhlanhla Nene will publish a bill for comment later this month on the carbon levy, he said in his mid-term budget speech on Wednesday in Cape Town.
The carbon tax has been repeatedly delayed since it was first mooted in 2010. The government’s initial plans were based on a charge of 120 rand ($8.94) on every ton of carbon emitted above a 60 percent threshold. National Treasury officials estimated last year that the proposed tax may raise 8 billion rand to 30 billion rand in revenue a year.
Companies including steelmaker ArcelorMittal South Africa Ltd. and gold producer AngloGold Ashanti Ltd. have said the additional charges are unaffordable and will deter investment.
Ismail Momoniat, a deputy director general for the National Treasury, said the carbon tax probably won’t be implemented by April, the beginning of the next fiscal year. The tax will also be imposed in a “revenue neutral way” for the budget, with a reduction in the electricity levy helping to offset the higher charges, he said.
Funds raised from the carbon tax will be allocated to the government’s general revenue pool and not a separate one, Momoniat said.
The government pledged in 2009 to reduce its emissions by 34 percent by 2020 and cut them by 42 percent by 2025, on the condition that richer countries provide financial and technical assistance.