tax newsflash | 16 December 2017

Draft Carbon Tax Bill released for comment

by Mansoor Parker

On 14 December 2017, the South African National Treasury published a Draft Carbon Tax Bill (the “Bill”) for public comment, with the comment period commencing immediately and continuing until 9 March 2018. 

The following high-level points are important to note in relation to the Bill:

Implementation date

The actual date of implementation of the carbon tax will be determined through a separate process by the Minister of Finance and will be announced either during the course of 2018 or at the National Budget 2019, taking into account the state of the economy.

Tax incentives and revenue recycling measures

The announcement of the carbon tax implementation date 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 2022) on the price of electricity and energy-intensive sectors such as mining, iron and steel.

Net neutrality

The impact of the tax in the first phase is designed to be revenue-neutral in terms of its aggregated impact, when assessed together with the complementary tax incentives and revenue recycling measures.

Electricity price

In order to ensure a minimal impact on the price of electricity in the initial phase, a credit for (or reduction in) the electricity generation levy and the renewable electricity premium (built into the current price of electricity) will also be introduced.

Review of carbon tax

A review of the impact of the tax after at least three years’ implementation will be conducted. The review will take into account the progress made to reduce GHG emissions, in line with South Africa’s nationally determined contributions commitment. Future changes to rates and tax-free thresholds in the carbon tax will only follow after the review, and will be subject to the same transparent and consultative processes for all tax legislation, after any appropriate Budget announcements by the Minister of Finance.

For more information, please contact ENSafrica's tax department.


Mansoor Parker

tax | executive
cell: +27 83 680 2074

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No information provided herein may in any way be construed as legal advice from ENSafrica and/or any of its personnel. Professional advice must be sought from ENSafrica before any action is taken based on the information provided herein, and consent must be obtained from ENSafrica before the information provided herein is reproduced in any way. ENSafrica disclaims any responsibility for positions taken without due consultation and/or information reproduced without due consent, and no person shall have any claim of any nature whatsoever arising out of, or in connection with, the information provided herein against ENSafrica and/or any of its personnel. Any values, such as currency (and their indicators), and/or dates provided herein are indicative and for information purposes only, and ENSafrica does not warrant the correctness, completeness or accuracy of the information provided herein in any way.



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