Draft Regulations on the Carbon Offset have been published for comment.
According to a national treasury statement, the draft regulations flow from Section 13 of the Draft Carbon Tax Bill.
The draft regulations were first published for comment in June 2016.
Treasury recently announced that the carbon tax would come into effect on 1 June 2019.
The carbon tax allows for a carbon offset allowance “which provides flexibility to firms to reduce their carbon tax liability by either 5 or 10 per cent of their total greenhouse gas (GHG) emissions by investing in projects that reduce their emissions”.
Treasury points out that sixty-six written submissions were received during the initial consultation period.
Consequently, substantial changes were made to the draft regulations.
“Some sections of the regulation have been refined such as expansion of the eligibility criteria to include certain renewable energy and REIPPPP projects whilst more details have been added for clarity on the criteria for ineligible projects.”
Carbon offset projects need to be located within South Africa and implemented at the start date of the carbon tax, occur outside the scope of activities that are subject to the carbon tax to prevent double counting of the carbon emission reduction benefit and not benefit from other incentive programmes.
Written comment is invited until 14 December 2018.
Meanwhile, the standing committee on finance has “reluctantly” accepted the 1% increase in Value-Added Tax.
In a statement, the committee referred to the almost unanimous opposition to the increase from civil society.
“The committee has from the outset expressed serious reservations with the increase, among other reasons, for the negative impact on the poor and lower-income earners, who are already dealing with increases in fuel prices and the cost of living generally.”
The committee calls for the increase to be reviewed at the end of its third year of implementation in 2021.
In a separate matter, the Division of Revenue Amendment Bill has been passed by the national assembly and sent to the national council of provinces for concurrence.
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.
The bill will be processed by the select committee on appropriations.