Has SARS and DEA the correct tools to implement Carbon Tax

Has SARS and DEA the correct tools to implement Carbon Tax
June 2019 Newsletter Uncategorized

At the Highveld Priority Air Quality meeting held on 19 June 2019, a presentation was made on the data recovery of measured air pollution for February – April 2019, and they were only able to measure an average of 67,8% in Witbank.  How will the Department of Environmental Affairs reliably measure Carbon Emissions?  As it is our economy is under strain, and MCCI is concerned how this additional tax will impact our economy and local employment.

Below is a summary of the Business Unity South Africa (BUSA) comments.  BUSA said that the SARS consultative process consisted of a publication date in May 2019 and extension in June.  Also, how SARS requested input made it difficult to comment on this important tax. The SARS documents on carbon tax were posted on their website for public comment.

The date for comments was extended to 14 June 2019, which is after the date of the tax liability commencing while the extension of the deadline for comment is welcomed as it means that taxpayers will be expected to make financial provision for the carbon tax liability, before the Rules and procedures, which are the basis for financial provision, being available.

A completely new set of Rules for a new tax was drafted.  These rules require extensive and specialised review. National Treasury and SARS undertook to ensure a consultative process in respect of the development of these Rules.  Despite written requests from (BUSA) to clarify the process and timelines, this consultation has not taken place. A preliminary review reveals that very few of the concerns raised by BUSA and other commentators on the prospective Rules have been adequately taken into account in their development.

There also appears to have been insufficient engagement internally between the National Treasury (the drafters of the policy and Act) and SARS, as well as between national Government Departments (the National Treasury and the [former] Department of Environmental Affairs). The references to the internal consultation between DEA as the custodian of the emissions data and SARS in the slide presentation on the administration of the carbon tax, which has been shared with BUSA, are not reflected in the draft rules.

… “4. Carbon tax administration (institutional arrangements)

Implementation of the carbon tax requires an accurate system for monitoring, reporting and verification (MRV) of emissions. …

It is clear from the comments above that a significant amount of work is required to address the concerns raised. The required changes were implemented without understanding the reasoning for neglecting to address the commitments made on specific approaches to the administration of the carbon tax.

The full document is available at the secretariat, at secretary@middelburginfo.com