JOHANNESBURG - The long-awaited Carbon Tax Act, due to be implemented from Saturday, will put large companies operating in South Africa under increasing pressure to find viable strategies to make their operations more sustainable, an industry expert said on Friday.
The Act, which President Cyril Ramaphosa recently signed into law, has the primary objective of reducing greenhouse gas (GHG) emissions in a sustainable, cost effective, and affordable manner.
But it is a complex piece of regulatory framework that will have a severe cost impact on large businesses – especially those in the industrial sector, said David French, director of tax consulting at audit, accounting, tax and advisory services firm Mazars.
"In light of this, businesses will have to rely heavily on auditors who can advise from a risk and control perspective, tax consultants with an in-depth understanding of the (Act) in order to calculate and correctly apply tax credits, and experienced sustainability consultants who can advise on strategies to reduce operational carbon emissions," he said.
The carbon tax law will be implemented in two phases, the first falling between June 1, 2019 and December 31, 2022 and the second to start in 2023.