A leading National Treasury official has warned industry to prepare for a significant strengthening of South Africa’s carbon tax during the second phase of implementation, which will begin in January 2023, describing the first phase, which came into force on June 1, as “weak”. South Africa’s headline carbon tax rate has been set at R120/t of carbon dioxide-equivalent (CO2e) emissions. During the first phase, however, several tax-free allowances and offsets have been included, which will result in a materially lower effective tax rate of between R6/t and R48/t.
