SOUTH Africa should stick to its guns on the Carbon Tax, or risk losing its status as a country that was concerned about climate change, says National Treasury deputy director-general Ismail Momoniat.
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National Treasury deputy director-general Ismail Momoniat said yesterday that South Africa needed to stick to its guns on the Carbon Tax, charging that the levy was low and would not lead to job losses.

Momoniat said that there was a lot of scaremongering about the impact on jobs and production costs of the carbon emissions tax, which came into effect in June.

He said the mining industry was not one of 100 companies that had direct emissions the new law was targeting, adding that the tax was low.

South Africa should stick to its guns on the carbon tax, or risk losing its status as a country that was concerned about climate change, as has been the case with Australia, Canada and the US, which he described as climate denialists.

“We do not know why people are surprised when the bill has been through so many processes,” Momoniat said. “Business does not like being taxed. They will always lobby against it in one way or another, but now they are duty-bound to comply. There is always a contestation of taxes when they are new.”

Momoniat’s view follows Business Unity South Africa (Busa) and the Minerals Council South Africa warning that about 6800 jobs would be lost in the first phase of the two-year implementation of the tax.

Busa said it did not support the tax, because there was still no alignment of the carbon tax with the carbon budget system being developed by the Department of Environmental Affairs through the draft Climate Change Bill.

The group also argued that taxpayers had no certainty regarding allowances and cannot determine their liability impacting investment both at a provincial and national level.

Analysts have expressed concern that the lack of detail from the government on phase 2 of the tax, scheduled to be implemented after 2022, also represented a longer-term potential risk to the costs of energy-intensive companies on the JSE, from miners to manufacturers.

“The way the tax is designed is that there is a core 100 companies that make direct emissions to the environment and mining is not among those. Mining is an indirect emissions industry,” he said. “There is absolutely no reversal of the tax at this point. Why would there be when we are just implementing it.”

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