Carbon Tax

02/21/2024

Carbon tax became effective from 1 June 2019. The tax is being implemented in a phased manner, taking into account SA’s NDC commitments to reduce greenhouse gas emissions. The first phase will be from 1 June 2019 to 31 December 2025, and the second phase from 2026 to 2030. This ensures alignment with our NDC commitments under the Paris Agreement.

The phased introduction of the carbon tax, through a relatively modest initial effective tax rate that will increase over time, provides a strong price signal to both producers and consumers to change their behaviour over the medium to long term and promote a systematic transition to a low-carbon economy by opening up new business opportunities and stimulating innovative business models.

The implementation of the carbon tax will be complemented by a package of tax incentives and revenue recycling measures to minimise the impact in the first phase of the policy (up to the year 2025).

Disclaimer: The information contained in this article is a summary of current legislation and budget proposals proposed by the Minister of Finance on the 21st February 2024. We suggest that you do not act solely on material contained in the booklet as the nature of the information contained herein is general and may in certain circumstances be subject to misinterpretation. In addition, the budget proposals may not include all legislative adjustments which could be made in the near future. Consequently we recommend that our advice be sought when encountering these potentially problematic areas. While every care has been taken in the compilation of the booklet, no responsibility of any nature whatsoever shall be accepted for any inaccuracies, errors or omissions.