Long-awaited carbon tax to come into effect in 2015

Wednesday, February 27, 2013

Cape Town – The Minister of Finance Pravin Gordhan today announced plans to introduce a long-awaited carbon tax on 1 January 2015.

Presenting the 2013 National Budget in the National Assembly on Thursday, Gordhan said carbon would be priced by way of a carbon tax at the rate of R120 per ton of CO2 equivalent.

A tax-free exemption threshold of 60% will be set to soften the impact of the tax, with additional allowances for emissions intensive and trade-expose industries, he said.

The National Treasury will next month release an updated carbon tax policy paper for comment.

He said mechanisms to support the production of biofuel and more environmentally friendly fuel through the upgrade of oil refineries will be introduced.

Gordhan also encouraged organisations, smaller public entities and businesses to be creative and develop low-carbon projects through the Green Fund.

He said 590 applications were received in the first call for proposals, adding that the R800 million previously allocated to the fund will be topped up with an extra R300 million.

The tax on motor vehicle CO2 emissions will increase on April 1 – from R75 to R90 for every gram of emission per kilometer above 120g of C02 per kilometer and in the case of double cabs from R100 to R125 for every gram per kilometer in excess of 175g per CO2 per kilometer.

The levy on plastic bags will increase from 4c per bag to 6c per bag, while the environmental levy on incandescent light bulbs will increase from R3 to R4 per bulb. These increases will come into effect on 1 April. – SAnews.gov.za