Carbon Tax: Phase 1... 2….

The Carbon Tax Bill follows the polluter-pays-principle and commenced the gradual implementation of Carbon Tax in South Africa from 1 June 2019.

The Bill was introduced as a mechanism to assist Government in reducing South Africa’s Greenhouse Gas Emissions. Phase 1 of the Carbon Tax Regime was set to run from 1 June 2019 to 31 December 2022 with Phase 2 being implemented on 1 January 2023.

In the 2022 National Budget Speech, the Minister of Finance, Enoch Godongwana, announced that Phase 1 will be extended until 31 December 2025 with Phase 2 only being implemented on 1 January 2026.

The Carbon Tax rate was increased by R10 from R134 to R144 per tonne in the Budget Speech with effect from 1 January 2022. The rate will continue to increase annually by inflation. The annual increase during Phase 2 will increase with greater increments to reach $30 by 2030.

The Carbon Tax Period runs from 1 January to 31 December of each year with the return submission due date being on 31 July of the following year.

The Carbon Tax fuel levy was also increased during the 2022 Budget Speech by 1c per litre of petrol and diesel to 9c and 10c respectively, resulting in a discreet increase in the fuel price after all.