1. When will it be introduced?
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The Draft Bill looks like it could commence as soon as the 1st
of January 2017.
2. Why carbon tax?
The Bill is based on overwhelming evidence that shows the dangers we as a society are creating through environmental degradation.
And without a planet, you can forget about life, let alone an economy.
So, in order to minimise climate change, and to balance out greenhouse gases, the government has opted to join in on the global effort to reduce greenhouse gas emissions, through taxing it.
In doing this, companies are encouraged to help shape a more responsible economy moving into the future, through cleaner and more efficient sources of energy and technology.
The government aims to reduce greenhouse gas emissions by 34% by 2020 and 42% by 2025, as according to the United Nations' international guidelines.
3. What will the tax be?
The Draft Bill says the initial carbon tax will be R120 per tonne of CO2e (carbon dioxide equivalent).
But in order to assist the move into a 'greener' (more environmentally-friendly) economy, percentage-based thresholds will be introduced initially.
The basic threshold will be 60%, with some additional tax-free allowances, maximum thresholds and initial exclusions applying in certain situations.
This will result in the effective tax ranging from around R6 to R48 per tonne.
Below the 60% threshold, tax won't be payable.
The Bill will apply to emissions from industrial processes, product use, fossil fuel combustion and 'fugitive' emissions (the greenhouse gases emitted from extracting, processing and delivering fossil fuels).
The greenhouse gases to be covered by the Bill will include carbon dioxide, methane, nitrous oxide, per fluorocarbons, hydro fluorocarbons and sulphur hexafluoride
NOTE: With this Bill, liquid fuel will be taxed at the source, on top of the current fuel taxes.
4. What should you do?
We live in an age where big decisions, for the sake of this planet's future and all life on it, need to be made.
So by looking for solutions, we can help promote sustainability for this planet and the economy.
For example, instead of simply accepting and paying tax on the amount of greenhouse gases your company emits, rather analyse your in-house processes and find effective alternatives in emitting far less greenhouse gases than before.
The point of this Bill can only be effective if it encourages a more sustainable economy. And that depends on you.
*To see the draft Bill, with all its details, click here.
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