Home  »  Articles   »   Carbon Tax Bill Tabled

Articles
Carbon Tax Bill Tabled

November 22, 2018

National Treasury

The Carbon Tax Bill has been tabled in parliament.

The second Draft Carbon Tax Bill was published for comment in December 2017.

Public hearings on the bill were held on 13 March 2018.

The bill aims to:

• provide for the imposition of a tax on the carbon dioxide (CO2) equivalent of greenhouse gas emissions; and
• provide for matters connected therewith.

The bill calls for a R120 per ton carbon tax.

The tax is scheduled to come into effect on 1 June 2019.

The standing committee on finance will process the bill.

Meanwhile, the Money Bills Amendment Procedure and Related Matters Amendment Bill has been passed by parliament and sent to president Ramaphosa for concurrence.

The proposed legislation is a committee bill drawn up by the standing committee on finance.

It aims to amend the Money Bills Amendment Procedure and Related Matters Act of 2009 in order to:

• amend and insert certain definitions;
• clarify which instruments the Act apply to;
• correct the powers and functions of the committees dealing with matters related to the Act;
• clarify and amend the procedure, resultant reporting and periods involved in the amendment of money Bills and division of revenue Bills and related fiscal instruments;
• repeal certain provisions;
• establish the Parliamentary Budget Office as a juristic person and to strengthen the accountability model of the Parliamentary Budget Office; and
• provide for matters connected therewith.

The committee called for comment on the draft bill in July 2017.

In its report, the committee recommended a further review of the act to establish whether a process for tabling and consideration of revenue bills is required and how to boost meaningful public participation in the budget process.

The Division of Revenue Amendment Bill was also passed by parliament and sent for assent.

The bill seeks to amend the Division of Revenue Act of 2018 in accordance with the Money Bills Amendment Procedure and Related Matters Act of 2009.

In a separate matter, the Taxation Laws Amendment Bill (TLAB), Tax Administration Laws Amendment Bill (TALAB) and Rates and Monetary Amounts and Amendment of Revenue Laws Bill have also been passed by the national assembly and sent to the national council of provinces for concurrence.

Some of the main tax proposals contained in the TLAB include providing more flexibility for the treatment of retirement fund transfers and withdrawals, introducing a fringe benefit exemption for lower-income employees who receive a loan from their employer for low-cost housing, reviewing the International Shipping exemption for purposes of accommodating the use of replacement ships, shortening the write-off period for electronic communications cables, refinements and clarification for the conversion of debt to equity, the refinement of the interaction between the anti-avoidance rules for dividend stripping with corporate re-organisation rules, inserting rules addressing the use of trusts to defer tax or recharacterise the nature of income, introduction of a one year income characterisation rule for amounts accrued to portfolios of collective investment schemes to provide certainty and limit potential abuse.

The main tax proposals contained in the TALAB include the removal of the requirement to submit tax returns for individuals receiving a tax-exempt dividend, anti-forestalling amendments for excise duties, clarifications on handling incorrect invoices for value-added tax refunds and allowing the collection of value-added tax payments to apply across branches and divisions.

Other issues dealt with that arise from previous legislative commitments include extension of the employment tax incentive, annuitisation for provident fund members and review panel for VAT zero-rated items.

The Rates and Monetary Amounts and Amendment of Revenue Laws Bill seeks to:

• fix the rates of normal tax;
• amend the Estate Duty Act, 1955, so as to amend the rate of estate duty;
• to amend the Income Tax Act, 1962, so as to amend rates of tax and monetary amounts;
• amend the Customs and Excise Act, 1964, so as to amend rates of duty in Schedule 1 to that Act;
• amend the Value-Added Tax Act, 1991, so as to amend the rate of the Value-Added Tax;
• amend a provision so as to provide for more efficient taxation of electronic commerce; and
• provide for matters connected therewith.

The select committee on finance will process the bills.