2018 Budget Speech – Carbon Tax to be implemented by 1 January 2019

In his maiden budget speech, Minister of Finance Malusi Gigaba announces that the carbon tax will be implemented in 2019. In addition he indicates that further environmental fiscal reform is anticipated in the area of water resource management, mitigation of pollutants and waste recycling.

As quoted from the budget speech:

“Aside from raising revenue, the tax system is increasingly required to play a role in protecting the natural environment and promoting sustainable use of limited resources. Parliament is currently considering the draft Carbon Tax Bill, which will assist South Africa to meet its climate change commitments to reduce our carbon emissions. The tax will be implemented from 1 January 2019.

As with greenhouse emissions, the polluter-must-pay principle must also apply to other activities which harm the environment, like the dumping of plastics into our oceans and threatening of marine life. Working with the Department of Environmental Affairs, we will shortly publish a policy brief to broaden the scope of environmental fiscal reform, to explore fiscal and regulatory measures to improve water resource management, mitigate the emission of pollutants and encourage recycling to reduce waste, such as plastic, which is polluting our oceans.”

The second draft of the Carbon Tax Bill was recently tabled before Parliament and is under consideration with public commentary due by 9th March 2018.

We urge companies to unpack how this tax will impact them for the purpose of providing company-specific feedback to National Treasury and being ready when the tax becomes effective.

For more information on the carbon tax bill click here for the link.