Enviro taxes must bring real change
The Organisation Undoing Tax Abuse (OUTA) has urged Government to ensure that environmental taxes be clearly linked to real changes in behaviour.
OUTA’s Executive Director, Dr Heinrich Volmink, made the call at a seminar on carbon tax organised by the Mail & Guardian and Webber Wentzel.
“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 behavioral change or an acceleration in climate change mitigation.”
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, raised R90.795bn. Adding the projected revenue from these and the carbon fuel tax in 2019/20 brings the total to R103.570bn.
“So, if you’ve collected R100 billion ostensibly for environmental purposes, you’d expect that there was some major impact,” says Volmink.
But that impact is far less than expected.
One example is the plastic bag levy, which started at 3c per bag and is now 12c. “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 behavior have occurred?” asks Volmink.
“Arguably if the money collected from this tax had been used to drive the recycling industry, we may have seen some progress here.”
Volmink called for 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,” says Volmink.
“Citizens should have the fiscal right to see the correlation between revenue collection and climate change mitigation in way that’s clearly understandable.”