The Carbon Tax Act, Act 15 of 2019 was promulgated to provide for the imposition of a tax on the specific greenhouse gas emissions related to carbon dioxide (CO2) and to provide for matters connected therewith. Carbon tax and greenhouse gas emissions impact on the climate and as a result measures must be implemented to manage emitters and mitigate these emissions. The Act details who is liable (taxpayers) to pay an amount of carbon tax calculated with respect to specific activities and thresholds as determined in Schedule 2 of the Act.

This carbon tax must be levied in respect of the sum of the greenhouse gas emissions of a taxpayer calculated as the equivalent of those greenhouse gas emissions resulting from fuel combustion, industrial process, and fugitive emissions based on emission factors as determined by the Department of Environmental Affairs. Various allowances are available which must be calculated to determine the correct amount of tax imposed, and these are based on fossil fuel consumption, fugitive emissions, performance, and offsets which directly change the tax amount incurred.

Organisations need to determine whether the taxation applies to their operations and if determined that it applies, should determine the amount that will be levied against the undertaking. This includes a calculation as per the prescribed process and allowances provided in the act, against actual figures of production, use, and emissions emitted from the activity undertaken. Accurate determinations and resulting calculation reporting are highly prised as it ensures the correct tax amount levied against an organisation.