The conversation surrounding climate change was amplified in 2019 and the introduction of the Carbon Tax Act in June of that year brought that conversation home.
Despite the Carbon Tax Act being in effect, according to 5inc, there is a fair amount of resistance from businesses in offsetting their carbon emissions.
The Carbon Tax Act was introduced as a way to address the goal of reducing emissions by 33 percent by 2035. The act seeks to encourage players in certain industries to reduce their emissions by tying a tax to a certain threshold of emissions.
The tax itself will be implemented in phases with the first phase having started in June 2019 and extending through to 31 December 2022.
The reason behind this is so that businesses and individuals aren’t as heavily impacted by the implementation of this tax. Keep in mind that there is still a tax payable but how this tax is calculated will change as we move further into the decade.
The trouble is that according to managing director at 5inc, Yasmine Miemiec, local firms are more concerned with how much they will need to pay and not how to reduce their environmental impact.
“Instead of resisting these developments, businesses should put aside their concern about the application and calculation of their carbon tax liability that arises from the Carbon Tax Act which came into effect on 1 June 2019, and put their attention into reducing their carbon output whilst tightening up their ‘value chain’ to optimise costs,” says Miemiec
While the first phase is in effect, firms would do well to address how to lessen their carbon emissions. While this may not have an immediate effect, when the taxation levels increase in 2023, having done the leg work to reduce their carbon footprint, may put companies in better stead for the future.
One way to do this is by making use of analytical tools. These tools can help firms identify and then address where carbon emissions can be offset.
“Analytics tools can assist organisations by consolidating emissions data, factoring in the legislative allowances and deliver a tax liability amount payable. This significantly simplified carbon tax liability calculations,” explains operations director at EDS Systems. Francois du Plessis.
“South African businesses should hasten to explore ways in which to understand their impact on the environment, explore alternative energy sources and examine all possible carbon reduction avenues,” adds du Plessis.
Businesses then should focus on how best to start reducing their carbon footprint rather than getting hung up on the taxation process. Naturally, one cannot ignore taxation but by offsetting emissions, the carbon footprint is decreased and the result is a lower payable tax.
Think of it in terms of preparing for a test. Students don’t get the test and then prepare for the exam, they prepare despite not knowing what is going to happen.
The Earth is the exam in this example and if we want to leave the plant in a decent state for future generations, we’d all do well to consider how our carbon footprint can be decreased.[Image – CC 0 Pixabay]