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Carbon taxes should be revenue neutral, SAICA says

Publish date: 29 June 2010
Issue Number: 169
Diary: Legalbrief Environmental
Category: General

The South African Institute of Chartered Accountants (SAICA) has made a call for any further carbon taxes that may be introduced in SA to be revenue neutral.

'The efficacy of a carbon tax should not be measured by its revenue yield, but by its impact on emissions in the context of the overall government mitigation policy,' says SAICA chair of the Carbon Tax Committee and KPMG Tax Services manager Anja Finnern. She urges business to formulate a common position on carbon tax as a matter of urgency, notes the Business Day report. SAICA Carbon Tax Committee member and tax partner at Webber Wentzel Hennie Bester says that a revenue-neutral approach to new taxes means that, despite changes to the tax system, the State will not recover more (or less tax) from the taxpaying community - although the composition of that community may change owing to the introduction of such changes. He notes that international experience has also led to a broad consensus that revenue neutrality is the best practice for the introduction of a carbon tax. A unified approach will only be possible if business players educate themselves on the important issues arising from a carbon tax, what the international best practices around these are, and how the tax should fit in with an overall mitigation policy. Full Engineering News report