WHY IS OUTA CHALLENGING THE NEW CARBON TAX?

Recent announcements indicated that the Department of Treasury will implement another tax, called Carbon Tax, early in 2017. It has been projected that this tax will add R13.7 billion to the fiscus with an aim to reduce Green House Gas (GHG) emissions to combat Climate Change.

While OUTA supports efforts that effectively reduces pollution and GHG emissions, we do not believe that Treasury’s Carbon Tax initiative will help to reduce GHG emissions in the medium to long term. It is our view that the structure of this Carbon Tax, which is not ringfenced and directed to support or generate initiatives to combat GHG, will merely become another tax added to the general fiscus.

Furthermore, we believe that by adding a Carbon Tax to the cost of doing business, this will not necessarily change business behaviour (i.e. reduce the organisations emissions) and the cost of the Carbon Tax will more than likely be passed on to the consumer.

In short, if a new tax is not neutral in its impact on society and does not necessarily change the behaviour it is intended to, or is not used to secure a beneficial outcome for society, specifically in the areas that the tax is applied, then it is an irrational, unnecessarya and therefor and unjust tax and should be challenged.

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