[miningmx.com] – THE issue in respect of a carbon tax in South Africa is not whether one will be written, passed into law and levied in industry, but rather how it will be implemented.
That’s because South Africa’s National Treasury is set on the tax coming into existence in 2017 whilst the Davis Tax Committee is hoping there will be 100% threshold in its first year.
The threshold means that industry would be require to submit returns in the first year of implementation, but be exempt from having to pay a tax until the following year in 2018.
Currently, there is no harmony between the committee’s view that a 100% threshold be applied. It has recommended one, but the Carbon Tax Bill – which was recently issued for public comment – does not provide room for one, at least, not at the moment.
As expected the public response to the prospect of a carbon tax has been heated.
“South Africa is already operating below the peak-plateau-decline trajectory or carbon emissions per unit of GDP to which President Zuma committed the country is Copenhagen in 2009,” said Roger Baxter, CEO of the Chamber of Mines.
“Since South Africa has alrady achieved these targets, the proposed carbon tax will have no effect in this regard,” he said.
Baxter added that South Africa only accounted for 0.9% of global carbon emissions so the country’s efforts would have little meaning especially in the absence of a global deal on climate change.
The counter argument, however, is that as a percentage of GDP, South Africa’s carbon footprint is in the world’s top 20, largely owing to the fact that more than 80% of electricity is generated from burning coal.
For the mining sector, the impact is another straw on the camel’s increasingly encumbered back.
According to Neal Froneman, CEO of Sibanye Gold, the combination of a carbon tax and the tax changes recommended in the Davis Tax Committee is another R800m in costs per year.
“If anyone in their right minds thinks this isn’t going to affect jobs …” he said rhetorically.
