Amendments to the Carbon Tax Act, 15 of 2019 and Regulations 

5 January 2023

The Taxation Laws Amendment Act 2022 amended sections 5 and 6 of the Carbon Tax Act providing for a progressive increase in the rate of tax. The following amendments are applicable as follows from 1 January 2023.

Section 5 (1). provides that carbon tax should be imposed at a rate of R144 per ton carbon dioxide equivalent of the greenhouse gas emissions of a taxpayer. This is subject to provisions in subsection 2 and 3 of the Act.

Section 5 (2). provides for the progressive increase of the carbon tax payable. Relevant rates have been identified as follows:

• R159 for tax periods from 1 January 2023 until 31 December 2023
• R190 for tax periods from 1 January 2024 until 31 December 2024
• R236 for tax periods from 1 January 2025 until 31 December 2025
• R308 for tax periods from 1 January 2026 until 31 December 2026
• R347 for tax periods from 1 January 2027 until 31 December 2027
• R385 for tax periods from 1 January 2028 until 31 December 2028 
• R424 for tax periods from 1 January 2029 until 31 December 2029
• R462 for tax periods from 1 January 2030 until 31 December 2030.

Section 5 (3). The rate of tax specified in subsection (1) may be adjusted by the Minister in his annual budget and the review undertaken every three-years considering the impact of exchange rate movements on the comparability of the rate to global carbon pricing.

For more background and explanations on these changes read the National Treasury Explanatory Memorandum here.

You can read the Taxation Laws Amendment Act here.