South Africa’s National Treasury said South Africa’s recent Nationally Determined Contribution (NDC) pledges under the Paris Climate Agreement require the country to significantly reduce its emissions from the climate. energy, including greenhouse gas emissions from the transport sector, which accounts for nearly 11% of the country’s total greenhouse gas emissions.

“The carbon tax on fuel emissions (the carbon fuel tax) is an important policy tool to internalize the costs of emissions in fuel prices and encourage behavioral changes of fuel users towards energy efficient fuels and low-carbon, alternative electric vehicles, the use of public transport and alternative modes of transport, ”the Treasury said.

The Treasury, in an interview with Business Report last week, said that internationally, South Africa is somewhere in the middle when it comes to the size of its withdrawals.

“Aside from levies, the price of fuel is primarily determined by the price of oil in international markets and the rand / dollar exchange rate. Levies are applied by many countries internationally, taking into account the impact on the environment and the resulting greenhouse gas emissions.

Oil price hikes hit record highs last month, rubbing salt in the wounds of overburdened consumers. Motorists using gasoline-powered vehicles started paying R18.20 per liter for 95 unleaded gasoline, while 93 unleaded gasoline increased by 91 cents per liter and diesel by 55.58.

Fuel taxes currently imposed in the country included the General Fuel Tax (GFL), Traffic Accident Tax (RAF), which the ministry described as a small tax to fund paraffin marking. (to limit the mixture of diesel and paraffin lighting), a relatively modest carbon tax and excise tax that were included in the Southern African Customs Union (SACU) revenue pool.

The Treasury said these have been imposed both as a revenue-raising instrument for general government spending and to compensate victims of vehicle accidents and as a way to tackle negative externalities from fossil fuels and vehicle use.

He added that the main negative environmental externalities associated with fuel combustion were greenhouse gas emissions and local air pollution and the social costs associated with using the road, including traffic jams, noise, traffic. injuries and loss of life as a result of traffic accidents.

The Treasury said the government had not adjusted its taxes or levies based on daily or monthly movements in the price of fuel.

Each year, it has received numerous requests for lower or higher tax rates or specific levies. “These requests are evaluated, before the annual budget in February of each year, to determine whether they meet the policy and revenue goals, as any rate announcements are made only on Budget Day.”

In the case of fuel levies, budget documentation for previous budgets spanning many years showed that there was a multiplicity of targets with the many levies that had an impact on the price of fuel for fuel. the motorist. This included the need to build and maintain road infrastructure and reduce carbon emissions.

Last month, the Ministry of Mineral Resources and Energy told the Business Report that the continued high price of crude oil by oil producers had affected most economies and that high price was not based on economic fundamentals but on market dictates.

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BUSINESS REPORT


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