Purchasing Eligible Carbon Tax Offsets
With the launch of the Carbon Offset Administration System (COAS) on 23 July, entities liable to pay carbon tax can now reduce their tax liability by purchasing eligible carbon tax offsets. In anticipation of the establishment of a local carbon market, EcoMetrix has developed a portfolio of eligible projects that can supply Carbon Tax Offsets (CTOs) to entities liable under the carbon tax.
The EcoMetrix portfolio includes a wide range of projects – including landfill gas to energy, N2O abatement, renewable energy and energy efficiency – which can provide CTOs across the different tax periods within the first phase of the carbon tax running from 1 June 2019 to 31st December 2022.
Before a CTO can be utilised to reduce the tax burden, it goes through an extensive approval process. To be eligible, a project needs to be located in South Africa and registered under the Clean Development Mechanism (CDM), Gold Standard (GS) or Verified Carbon Standard (VCS). In the final stage of approval by the Department of Mineral Resources and Energy, projects and the carbon credits generated, are assessed against a number of local criteria e.g. project type, vintage, government support.
Closely following regulatory and market developments, EcoMetrix provides several services in respect of the utilisation of CTOs by taxpayers including:
• Setting up accounts on the COAS system enabling taxpayers to reduce their tax burden via the use of CTOs using their COAS account
• CTO commercialisation support whereby EcoMetrix facilitates the sale and purchase of CTOs as well as the transfer of CTOs between COAS accounts
• CTO utilisation assistance to retire CTOs and generate a tax certificate underpinning the offsetting of a taxpayer’s carbon tax liability
To offset a taxpayer’s 2019 carbon tax liability which is due in less than 10 weeks (31 October 2020) the above steps need to be completed in rapid order. The timeous submission of a CTO certificate to SARS is imperative to avoid missing out on the tax discount for 2019. EcoMetrix can assist with this process. To speak to one of our partners, email lodewijk.nell@ecometrix.co.za or henk.sa@ecometrix.co.za.
For more information click here or to read the media statement click here.