3 December 2019
Two further sets of draft regulations flowing from the Carbon Tax Act have been published for comment.
National treasury published Carbon Tax Offset Regulations at the end of last week.
The two additional proposed regulations are Draft Regulations for the Trade Exposure Allowance for purposes of section 10 and Draft Regulations for the Greenhouse Gas (GHG) Emissions Intensity Benchmarks for purposes of section 11 in terms of section 19(b) and (a) of the Act, respectively.
According to a treasury statement, the publishing of the draft regulations follows an “extensive stakeholder consultation process on the design of the carbon tax and tax free-allowances since the publication of the Carbon Tax Policy Paper in 2013 and the 2015 version of the Carbon Tax Bill”.
Treasury plans to gazette the final regulations by the first quarter of 2020 to be aligned with the greenhouse emissions reporting period of the environment, forestry and fisheries department.
Highlighted amendments in the carbon offset regulations include inclusion of renewable energy, eligibility of electrical efficiency projects, clarification of eligible projects and the use of credits generated prior to the implementation of the carbon tax, administration of the carbon offsets and administration of the carbon offsets.
The Draft Regulations for the Trade Exposure Allowance give effect to the sector based allowance and provide a list of sectors and subsectors and their respective trade exposure allowances and outlines an alternative approach to calculate the trade exposure allowance for companies.
The Draft GHG Emissions Intensity Benchmark Regulations set out the emissions intensity benchmarks for various sectors and subsectors.
Comment on the draft regulations is invited until 17 January 2020.
Meanwhile, speaking at the JP Morgan South Africa Opportunities Conference in Cape Town, the deputy finance minister, David Masondo, declared that growing the economy will require the increase of both foreign and domestic financial capital.
Treasury holds the view that the savings of workers must be protected and the onus must be on economic actors to ensure that the value proposition of the investment is sound.
“Government should not compel asset managers to invest their clients’ money in unsound or poor-return projects.”
The deputy minister also declared that “raising taxes in the context of low economic growth is no longer an option”.
As regards spending, the plan is not only to reduce spending but also improve how money is spent by directing it at growth enhancing activities.