As the year winds to a close we always like to keep you updated and informed. This particular newsletter has transformed over the year that has been, becoming a flexible update on all topics commercial.
In today’s issue we reflect on two pieces of proposed documents which inevitably will impact on your business and summarise the purpose of these.
Carbon Tax Policy Paper
The South African government is looking to introduce a carbon tax on 1 January 2015. The objective of this form of taxation is to support South Africa’s commitment to reduce greenhouse gas emissions by 34% by 2020 and 42% by 2025 against a business as usual curve. It is anticipated that 60% of emissions will be tax-exempt for certain industries until 2020 to allow for a smooth transition for business.
What is a carbon tax?
A carbon tax simply penalises companies and individuals that emit more carbon. Emissions can occur from various sources although the most common being transportation and electricity usage.
Government has proposed a carbon tax of R120 per tonne of CO2e (carbon dioxide equivalent) on scope 1 emissions. The tax will come into effect on 1 January 2015, and increase by 10% a year until 2020. The carbon tax will be designed to create incentives for companies, businesses and individuals to change their behaviours and consumption patterns to reduce the reliance on fossil fuels.
The Licensing of Businesses Bill, 2013
The Department of Trade and Industry (the dti) is currently consulting the public on widespread provincial visits on the Licensing of Business Bill.
The Bill proposes to repeal the current Businesses Act, 1991 in terms of which certain types of businesses that may impact on public health are required to be licensed by the municipality in which they are situated. The types of businesses that currently require licences include restaurants, businesses selling perishable foodstuffs, cinemas and theatres, night clubs, and businesses providing massage or infra-red treatments. The Licensing of Businesses Bill proposes that all businesses will require a licence issued by the municipality in which they are situated. As such, the licensing requirement is greatly expanded.
Although the Bill provides that municipalities may exempt categories of persons from the licensing requirements, the default position would be that a licence would be required in each municipality in which a particular business operates premises for the sale of goods or services to the public. The Bill provides that business licences may be revoked for various reasons including selling counterfeit goods, contravening customs and excise legislation, or employing an illegal immigrant.
The Bill does three deeply problematic things. First, it further increases the burden of red tape on businesses and makes entrepreneurship even less attractive in South Africa. Second, it gives sweeping powers to South Africa’s often-dysfunctional municipalities, including broad search and seizure powers and the power to impose conditions on businesses at will. Third, it seems clearly intended to make life even harder for South Africa’s immigrants, giving the Bill an ugly, populist aspect.
So all in all a tough year legislatively and red tape wise for South Africa. We hope 2014 will bring with it some brighter news to support the National Development Plan and inevitably job creation.