Carbon's Taxing Affair

Government’s proposed carbon tax seems to be ill-conceived. Combating climate change certainly needs to be on South Africa’s agenda, but more thought and time is required to create and implement effective policies.

- ​​​​​​​David McKay

What’s planned by government is a delicate eggs en cocotte, but it’s more likely the country’s mining sector will be served a regular scrambled. That’s the gastronomic equivalent of the proposed carbon tax which is due for adoption by the National Council of Provinces during the week this edition of finweek went to print, and effective 1 June. The premise is a tax of R120 per tonne of carbon dioxide (CO2) in its first phase.

Some offsets are allowed by up to 70% of the total tax, but even considering this, the Minerals Council of South Africa considers the tax onerous and is not lending its support to the legislation, officially known as the Carbon Tax Act.

“Carbon taxes are part of the toolbox in dealing with climate change, so we accept it,” said Roger Baxter, CEO of the council. “But it needs to be part of a toolbox that works. SA shouldn’t be thinking about this yet. Yes, it should be getting its policies in line, but there needs to be breathing room. We just seem to be jumping into something that will detract from industry competitiveness.”