Carbon Tax

Carbon Tax is a new tax in response to climate change, which is aimed at reducing greenhouse gas (GHG) emissions in a sustainable, cost effective and affordable manner. The Carbon Tax Act of 2019 came into effect on 1 June 2019 and is assessed, collected and enforced as an environmental levy in terms of the Customs and Excise Act of 1964 by the South African Revenue Service.

Carbon Tax gives effect to the polluter-pays-principle and helps to ensure that firms and consumers take the negative adverse costs of climate change into account in their future production, consumption and investment decisions.  
The Carbon Tax Act recognises six main GHGs that are emitted from industrial activities, i.e. carbon dioxide (CO2), methane (CH4), nitrous oxide (N2O), hydrofluorocarbons (HFCs), perfluorocarbons (PFCs) and sulphur hexafluoride (SF6). 

The Carbon Tax is imposed on companies that operate emissions generation facilities at a combined installed capacity equal to or above a specified threshold which requires these companies to license each of their emissions generation facilities with the South African Revenue Service as customs and excise manufacturing warehouses for environmental levy purposes. Every licensee must submit an annual Carbon Tax environmental levy account in respect of each of its licenced facilities in the month of July of the year following the tax period.