5 ‘green’ taxes that are hitting South Africans in the pocket

The Organisation Undoing Tax Abuse (Outa) has released a graph showing all of the additional environmental taxes that South Africans are currently paying.

The organisation said that these taxes have contributed a total of R103. 61 billion, but have not been clearly linked to real changes in behaviour.

“It would be disastrous if an issue as critical as climate change was used to simply raise more revenue by government without a clear link to behavioural change or an acceleration in climate change mitigation,” said Outa’s executive director, Dr Heinrich Volmink.

South Africa introduced a carbon tax this year, with a carbon levy on fuel and an emissions tax on businesses.

This is in addition to five other environmental taxes which already exist: the plastic bag levy (implemented from 2004/05); the incandescent light bulb levy (2009/10); the electricity levy (2009/10); the CO₂ tax on vehicle emissions (2010/11); and the tyre levy (collected by SARS from 2016/17).

Volmink said that these taxes had, since their inception up to March 2019, have raised R90.79 billion. Adding the projected revenue from these and the carbon fuel tax in 2019/20 brings the total to R103.57 billion, he said.

“So, if you’ve collected R100 billion ostensibly for environmental purposes, you’d expect that there was some major impact,” said Volmink.

Ring-fenced? 

However, Volmink said that the impact of these taxes has been far less than expected.

One example is the plastic bag levy, which started at 3c per bag and is now 12c, he said.

“The number of plastic bags produced per annum has actually gone up – from 2 billion in the first full year of the levy (2005/06) to just under 2.6 billion bags in 2018/19. So, what changes in behaviour have occurred?

“Arguably if the money collected from this tax had been used to drive the recycling industry, we may have seen some progress here.”

To this end, Volmink said that there should be a discussion on ring-fencing at least part of such taxes.

He emphasised the need to link climate change mitigation to poverty alleviation: partly because climate change has a bigger impact on the poor, partly because climate change mitigation can drive job creation in the green economy, and partly because such funds could assist poorer households to gain better access to renewable energy, as has been argued by various experts.

“At the very least government should clearly show all of the revenue collected from environmental levies, including the carbon tax, on the one hand and the total expenditure related to climate change mitigation on the other. Even if the revenue collected is recycled into the general fiscus, there should at least be some approximation between these two amounts,” he said.

“Citizens should have the fiscal right to see the correlation between revenue collection and climate change mitigation in way that’s clearly understandable.”


Read: When you are not required to file a tax return

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5 ‘green’ taxes that are hitting South Africans in the pocket