Customs Updated:
31 Jul 2017

Tariff Book (S1 P1)
Carbon Tax Levy - Comment due

On 30 April the South African Revenue Service (Sars) published draft amendments to the Rules to the Customs and Excise Act, 1964, in respect of the Environmental Levy for carbon tax imposed in terms of the Carbon Tax Act, 2019, on which comment is due by 20 May.

The draft amendments relate to: (i) Part 1 of Schedule No 1 to the Act, 1964 ‘Ordinary Customs Duty’, in order to insert the provision of carbon emissions tax; (ii) Part 3F of Schedule No 1 to the Act, 1964’ Environmental Levy’, to provide for the environmental levy on carbon emissions; and Part 6 of Schedule No 6 to the Act, 1964, ‘Refunds and Rebates of Excise Duties, Fuel Levy and Environmental Levy - to provide for rebates and refunds on carbon tax.’

1. Implementation of Environmental Levy on Carbon Emissions

Government proposed the introduction of carbon tax as announced by the Minister of Finance in Budget Review 2015 and further outlined in Budget Review 2019.This tax gives effect to the polluter-pays principle. Carbon tax will assist in reducing emissions and ensuring that South Africa meets its commitments under the 2015 Paris Climate Agreement. The tax will come into effect on 5 June 2019.

 

2. Amendments to the Carbon Tax emissions

The proposed amendments mentioned in the following paragraphs are in respect of:

 

2.1 Amendment of Part 1 to Schedule No. 1

Additional Note 11 in Part 1of Schedule No.1 to Act, 1964 is being inserted to include the definition of carbon emissions.

The Additional Note will read as follows:

11. For the purposes of this Chapter, “carbon emissions” means the carbon dioxide equivalent of greenhouse gas emissions as defined in the Carbon Tax Act”.

The following tariff subheading is inserted:

9903.00 Carbon emissions

 

 

 

2.2 Amendment of Part 3F to Schedule No 1

Part 3Fof Schedule No.1 is inserted to provide for the environmental levy on carbon emissions. Notes have been developed to assist in the administration of this levy. The Notes will read as follows:

1. Any rate of environmental levy on carbon emissions specified in this Section shall apply to gas emissions resulting from activities conducted in the Republic.

2. Any environmental levy payable in terms of this Section in respect of carbon emissions specified therein shall be additional to any Customs and Excise duty payable in terms of Part 1 or 2 of Schedule No.1 or any Section in this Part.

3. The amount of environmental levy payable on carbon emissions in terms of this Section shall be calculated as prescribed in section 6 of the Carbon Tax Act.4. “Carbon emissions” where used in this Part means carbon emissions as defined in Additional Note 11 to Chapter 99 of Part 1 of Schedule No.1.”

The following tariff item is inserted:

157.00/9903.00 Carbon emissions R120/t CO2 emissions

157.00/9903.00 Carbon emissions

 

2.3 Amendment of Schedule No. 6

Part 6 of Schedule No.6 to the Act, 1964 is inserted to provide for rebates and refunds on carbon tax. Notes to Part 6 of Schedule No.6 to the Act, 1964 to institute control measures that will enable governance and administration of the proposed rebate items. The following Notes are inserted:

1. The environmental levy on carbon emission payable in terms of Section F of Part 3 to Schedule No.1 shall be calculated in accordance with provisions of section 6 to the Carbon Tax Act.

2. The allowances specified in this Part may be offset on the account from the amount leviable in respect of the sum of emissions for the accounting period in which the emission occurred.

3. “Carbon emissions” where used in this Part means carbon emissions as defined in Additional Note 11 to Chapter 99 of Part 1 of Schedule No. 1.”

The following rebate items are inserted:

692.02/00.00/02.00 Basic tax-free allowances for fossil fuel combustion emissions, subject to compliance with section 7 in Part II and section 14 in Part III of the Carbon Tax Act

692.03/00.00/03.00 Basic tax-free allowance for industrial process emissions, subject to compliance with section 8 in Part II and section 14 in Part III of the Carbon Tax Act

692.04/00.00/04.00 Fugitive emissions allowance, subject to compliance with section 9 in Part II and section 14 in Part III of the Carbon Tax Act

692.05/00.00/05.00 Trade exposure allowance, subject to compliance with section 10 in Part II and section 14 in Part III of the Carbon Tax Act

692.06/00.00/06.00 Performance allowance, subject to compliance with section 11 in Part II and section 14 in Patrai of the Carbon Tax Act

692.07/00.00/07.00 Carbon budget allowance, subject to compliance with section 12 in Part II and section 14 in Part III of the Carbon Tax Act

692.08/00.00/08.00 Offsets allowance, subject to compliance with section 13 in Part II and section 14 in Part III of the Carbon Tax Act

Story by: Riaan de Lange