As part of its review of the South African tax system, the Davis Tax Committee (DTC) would now also review the scope and design of the proposed carbon tax, following many stakeholder requests.

Led by Judge Dennis Davis, the DTC noted that, although not listed in its terms of reference, there was sufficient scope within the broader mandate of the committee to review the proposed carbon tax.

“It is clear that a carbon tax can play a role in achieving the transition to a low carbon economy and South Africa’s commitment to help in the international efforts to reduce greenhouse-gas emissions, as reflected in the National Climate Change Response White Paper and the National Development Plan,” the committee said in a statement.

Finance Minister Nhlanhla Nene had announced in his February budget speech that a draft Carbon Tax Bill was expected to be published for public comment during the course of this year.

This would be a culmination of discussion papers released by the National Treasury for comments in 2010, 2013 and 2014. These papers and further information on the carbon tax were available from Treasury.

“These commitments and aspirations should also take into account any possible negative economic and social impacts of the carbon tax over the short-term and, hence, the need for a smooth and gradual transition toward a low-carbon economy,” the committee added.

Government was proposing the implementation of a carbon tax of R120/t of carbon equivalent as from January 2016. The tax had initially been scheduled for implementation in January 2015, but was delayed by a year to allow for further consultation.