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April 4, 2019

South Africa introduces bill for administration and collection of Carbon Tax

Executive summary

South Africa’s Customs and Excise Amendment Bill1 (the Bill) was recently introduced in the National Assembly. The purpose of the Bill is to provide for the administration and collection of the Carbon Tax. It sets forth provisions relating to allowances, licensing and rules.

It has further been confirmed that the first tax period for the Carbon Tax will commence on 1 June 2019 and end on 31 December 2019.

Detailed discussion


The Bill was published in the Government Gazette on 5 February 2019 and subsequently introduced in the National Assembly.

The purpose of the Bill is to amend the Customs and Excise Act 91 of 1964 to provide for the administration and collection of the Carbon Tax. The Bill specifically inserts section 54AA which is referred to as “Provisions relating to Carbon Tax.”

Important provisions

The Bill contains three provisions relating to the Carbon Tax, the first addressing allowances, the second on licensing and the final provision addresses rules in general. The provisions are summarized below in more detail.


The Carbon Tax Bill provides for allowances, which are intended to reduce a taxpayer’s carbon tax burden. The Bill provides that these allowances and limits must be administered as rebates, refund or drawbacks in terms of the Customs and Excise Act.

The assumption is that specific rebate items will be included in the schedules to the Customs and Excise Act. These rebate items will provide the rules, requirements and limits applicable to the different types of allowances.

The specific rebate items and their requirements have not been made public yet.


The Bill requires that a taxpayer (for carbon tax purposes) must license any premises on which emissions occur with the South African Revenue Service (SARS). Such licensing will occur in terms of section 54E of the Customs and Excise Act.

The abovementioned section makes clear that “any premises” on which emissions occur must be licensed. The result is that a taxpayer will have to register each site/location where emissions occur. A taxpayer will therefore not be able to register all its locations under one overall license.

The Bill does not provide specific requirements but these will be contained in the rules that will be released in future.


The Commissioner is granted the authority to prescribe rules relating to the administration, requirements, procedures, submission of accounts, and collection, among others, of the Carbon Tax.

This allows the Commissioner to make general rules to assist in the administration of Carbon Tax.


1. B3 – 2019.

For additional information with respect to this Alert, please contact the following:

Ernst & Young Advisory Services (Pty) Ltd., Johannesburg
  • Johnathan Fillis |
  • Dreyer Swart |
Ernst & Young Advisory Services (Pty) Ltd., Cape Town
  • Redge De Swardt |



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