Carbon tax could hit economy Sacci

Measures should be revenue neutral

The proposed introduction of carbon tax could have a severe impact on the economy and job creation in South Africa, Sacci said on Monday.

[We are] supportive of measures to reduce carbon emissions in principle, so long as those measures remain tax neutral, SA Chamber of Commerce and Industry (Sacci) CEO Neren Rau said in a statement.

He said Sacci had submitted comment to the Treasury on the carbon tax policy paper, which provides a framework discussion on plans to introduce a carbon tax of R120 per ton of carbon dioxide from 2015.

The submission included comment on the sparse details or commitments on revenue recycling options like tax credits for investment in energy efficient machinery, Rau said.

The paper also underestimated the rigidity of the labour market and the ability of business to absorb workers dismissed from energy-intensive industries.

Sacci will continue to engage with the National Treasury in order to find a policy solution to climate change that will not endanger economic growth and job creation, Rau said.

In his budget speech in February, Finance Minister Pravin Gordhan announced the introduction of a carbon tax to mitigate the effects of climate change. In May Treasury introduced the carbon tax policy paper, titled Reducing greenhouse gas emissions and facilitating the transition to a green economy, for public comment.