Mboweni’s carbon tax roundly slammed by the usual suspects

There has been largely negative reaction to Finance Minister Tito Mboweni's announcement last week that a Carbon Tax – which forms part of government's efforts to deal with climate change – will be instituted in early June on petrol and diesel. According to a Fin24 report, the tax is based on the ‘polluter pays’ principle. It prices greenhouse gas emissions, and aims to ensure that businesses and households take pollution into account in their production and consumption investment decisions, Treasury explained in its 2019 Budget Review document. ‘The tax will assist in reducing emissions and ensuring SA meets its commitments under the 2015 Paris Climate Agreement,’ the Budget document read. It will be reviewed in three years. From 5 June 2019, a carbon tax of nine cents per litre will be implemented on petrol and 10c/l on diesel. Refunds cannot be claimed against the carbon tax, Treasury added. The Automobile Association, in response to the Budget, said the tax was ‘grossly unfair’ as South Africans will be paying an emissions tax on ‘inferior quality fuel’ despite not having access to higher quality fuels, which are available in many other markets in the world. The Organisation Undoing Tax Abuse (Outa) raised concerns that the tax would push up the price of consumer goods, along with other fuel levy increases. ‘Just as the plastic bag tax has not changed consumer behaviour or reduced pollution, and the funds were not used for recycling initiatives as initially promised, this carbon tax on petrol will just be another revenue stream for government’s coffers,’ Outa's statement read. Cosatu also commented that the carbon tax, in addition to an increase in the sugar beverages tax, was an indication that government had abandoned previous commitments to protect vulnerable workers.

Full Fin24 report