On 1st March 2019, the Select Committee on Finance invited Stakeholders and interested parties to submit written comments on the South African Carbon Tax Bill to be presented before the National Council of Provinces (NCOP) today, 12th March 2019. This was following the majority vote in Parliament in favour of the Bill on 19th February 2019.
During the public hearing today, Tuesday 12th of March, in the old assembly in Cape Town, there were several submissions from industry associations, the business community as well as non-profit organisations. According to EcoMetrix Africa consultant, Thapelo Tladi, who closely followed the proceedings, tough opposition from stakeholder affected by the tax remains persistent. Most of the submissions however reiterated concerns already raised during prior stakeholder consultations. Overall most of the comments dealt with the anticipated social and economic impacts of the tax and practical matters concerning its implementation, including but not limited to the following:
• The impact of the tax on electricity prices and how this would eventually lead to increased cost of doing business in South Africa
• The promulgation of the Customs and Excise Amendment Bill which is required for the Carbon Tax bill to take effect
• The alignment of the Carbon Tax with the Carbon Budget system as part of the Post-2020 Mitigation System and other climate change policies still in draft form or not yet formulated
• The state of readiness of government institutions to implement, develop and monitor the impact of the tax was questioned with regards to emissions baseline data and costs of administration of the tax to the tax payers, among others
• Ringfencing of carbon tax revenue and recycling to environmental programmes
National Treasury and the Department of Environmental Affairs present during the public hearing responded to the submissions affirming that the current Bill was the result of an extensive stakeholder consultation process and that during this process issues raised were already addressed, making concessions and changes while going along. Nevertheless, various comments were responded to, again, during the hearing today.
Following the hearing, the NCOP will draw up a report with recommendations to be discussed next week at a plenary session, after which a vote on the bill will be made. If the council passes the bill as is, it will be submitted to the president for assent. However, If the NCOP passes the bill subject to amendments or rejects the bill, it will be sent back to the National Assembly which must reconsider the Bill, taking into account any amendment proposed by the Council. In case of the latter, further delays with implementation of the bill should be anticipated.
Thapelo Tladi, consultant at EcoMetrix Africa comments that “the submissions made today regarding the Carbon Tax by various parties who will be directly or indirectly affected by the environmental levy is reflective of how complex the process to develop this bill has been. By all accounts many of the issues raised today are not new but nonetheless remain pertinent issues that business, NGOs, labour and industry associations require clarity on. However, the extent to which the issues raised would necessitate an amendment of the Bill remains to be seen, which will invariably have implications on when the bill is officially signed into law".
For further information, please contact
Mr Henk Sa
Partner at EcoMetrix Africa T +27 78 459 5748 E henk.sa@ecometrix.net
Mr Lodewijk Nell
Partner at EcoMetrix Africa T +27 78 704 2678 E lodewijk.nell@ecometrix.net
During the public hearing today, Tuesday 12th of March, in the old assembly in Cape Town, there were several submissions from industry associations, the business community as well as non-profit organisations. According to EcoMetrix Africa consultant, Thapelo Tladi, who closely followed the proceedings, tough opposition from stakeholder affected by the tax remains persistent. Most of the submissions however reiterated concerns already raised during prior stakeholder consultations. Overall most of the comments dealt with the anticipated social and economic impacts of the tax and practical matters concerning its implementation, including but not limited to the following:
• The impact of the tax on electricity prices and how this would eventually lead to increased cost of doing business in South Africa
• The promulgation of the Customs and Excise Amendment Bill which is required for the Carbon Tax bill to take effect
• The alignment of the Carbon Tax with the Carbon Budget system as part of the Post-2020 Mitigation System and other climate change policies still in draft form or not yet formulated
• The state of readiness of government institutions to implement, develop and monitor the impact of the tax was questioned with regards to emissions baseline data and costs of administration of the tax to the tax payers, among others
• Ringfencing of carbon tax revenue and recycling to environmental programmes
National Treasury and the Department of Environmental Affairs present during the public hearing responded to the submissions affirming that the current Bill was the result of an extensive stakeholder consultation process and that during this process issues raised were already addressed, making concessions and changes while going along. Nevertheless, various comments were responded to, again, during the hearing today.
Following the hearing, the NCOP will draw up a report with recommendations to be discussed next week at a plenary session, after which a vote on the bill will be made. If the council passes the bill as is, it will be submitted to the president for assent. However, If the NCOP passes the bill subject to amendments or rejects the bill, it will be sent back to the National Assembly which must reconsider the Bill, taking into account any amendment proposed by the Council. In case of the latter, further delays with implementation of the bill should be anticipated.
Thapelo Tladi, consultant at EcoMetrix Africa comments that “the submissions made today regarding the Carbon Tax by various parties who will be directly or indirectly affected by the environmental levy is reflective of how complex the process to develop this bill has been. By all accounts many of the issues raised today are not new but nonetheless remain pertinent issues that business, NGOs, labour and industry associations require clarity on. However, the extent to which the issues raised would necessitate an amendment of the Bill remains to be seen, which will invariably have implications on when the bill is officially signed into law".
For further information, please contact
Mr Henk Sa
Partner at EcoMetrix Africa T +27 78 459 5748 E henk.sa@ecometrix.net
Mr Lodewijk Nell
Partner at EcoMetrix Africa T +27 78 704 2678 E lodewijk.nell@ecometrix.net
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