Big en­ergy users op­pose pro­posed SA car­bon tax law

The New Age (Gauteng) - - SPORT -

BIG en­ergy users, in­clud­ing SibanyeStill­wa­ter and ArcelorMit­tal’s lo­cal unit, yes­ter­day op­posed plans by South Africa to en­act long­de­layed car­bon tax laws in 2019, ar­gu­ing the levies were un­af­ford­able and should be scrapped or de­layed.

The car­bon tax has al­ready been post­poned at least three times since first be­ing mooted in 2010, af­ter min­ing com­pa­nies, steel firms and state­owned power util­ity Eskom said it would erode prof­its and push up elec­tric­ity prices.

For­mer fi­nance min­is­ter Malusi Gi­gaba said last month that SA would im­ple­ment the car­bon tax from Jan­uary next year – part of a raft of tax changes to plug a rev­enue hole.

The new law would af­fect about 1 000-1 500 com­pa­nies and 75% of na­tional emis­sions.

It pro­poses a tax rate of R120 per ton of car­bon diox­ide equiv­a­lent and states that to­tal tax­free al­lowances dur­ing the first phase un­til 2022 can be as high as 95%.

“Sibanye-Still­wa­ter’s po­si­tion on the im­po­si­tion and im­ple­men­ta­tion of a car­bon tax re­mains the same, that is, a to­tal re­jec­tion of the car­bon tax in any shape, form or quan­tum,” the gold and plat­inum miner said.

It de­liv­ered its opin­ion in a writ­ten presentation to Par­lia­ment at the start of pub­lic hear­ings on the sec­ond draft car­bon tax bill re­leased in De­cem­ber.

De­vel­oped in line with the pol­luter pays prin­ci­ple, the pro­posed car­bon tax bill in­cludes stag­gered in­creases and tax breaks in the early years, al­low­ing com­pa­nies to pay six rand to R48 per ton in the first phase, the na­tional Trea­sury said.

South Africa rat­i­fied the Paris cli­mate change pact two years ago and has pledged to cut emis­sions by al­most half by 2030. In­dus­trial firms said the pro­posed tax failed to take into ac­count a lower car­bon path al­ready adopted, will create pol­icy un­cer­tainty and di­min­ish South Africa’s in­vest­ment al­lure.

ArcelorMit­tal SA op­posed the tax bill on the grounds that it would hurt com­pet­i­tive­ness when it was strug­gling with cheaper im­ports and weak de­mand.

“When con­sid­er­ing 2016 and 2017 fi­nan­cial fig­ures, the es­ti­mated car­bon tax payable would have af­fected Ebitda fig­ures by 57% to 100%,” ArcelorMit­tal SA said.

The com­pany said its es­ti­mated car­bon tax li­a­bil­ity would be R100m a year and wanted changes to be made, in­clud­ing ad­di­tional tax in­cen­tives to pro­tect strug­gling com­pa­nies. – Reuters

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