R13.7 billion carbon tax will be pushed onto consumers: Outa

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The Organisation Undoing Tax Abuse (Outa) says that businesses and consumers must become more active in scrutinising tax proposals, like the new carbon tax that will be introduced in 2017, which will see as much as R13.7 billion in taxes being fed onto consumers.

According to Outa, the Treasury will implement the carbon tax early in 2017, following the publication of carbon off-set regulations due for comment later in June 2016.

“While Government’s stated and noble intention is that the tax will help to reduce Green House Gas (GHG) emissions in the medium to long term, Outa believes this will not necessarily be the case,” said Julius Kleynhans, Project Manager at Outa.

“The carbon tax will not necessarily change business behaviour, who will in turn merely pass on the tax costs to the consumer.”

The group emphasised its concern that the carbon tax will not be ring-fenced and that the South African government has a poor track record in the way it spends taxpayers’ money.

The tax is predicted to add R13.7 billion to the fiscus and Outa doesn’t believe the economic impact will be sufficiently off-set through revenue recycling or other initiatives expressed by Treasury.

On top of the tax itself, the costs of auditing and managing the tax will put another cost burden on businesses, Outa said – all while the policies to govern this aspect of the process are yet to be drawn up.

National Treasury is expected to launch the draft Carbon Tax Bill in August or September 2016.

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