Legalbrief, 19 March, 2019
Legislation: Airlines ask for carbon tax exemption
The airline industry made a strong plea in Parliament to be exempted from the proposed carbon tax saying it will undermine its competitiveness, according to a BusinessLIVE report. The tax only applies to economic activities which emit greenhouse gases within SA and will therefore not apply to international airlines. The tax, due to take effect from June, is provided for in the Carbon Tax Bill now before the National Council of Provinces’ Select Committee on Finance. Airlines Association of Southern Africa chief executive Chris Zweigenthal said the failure to exempt domestic flights from the tax would undermine competitiveness of domestic airlines, reduce the return on investment from state-owned airlines SAA and SA Express, and reduce the return on investment for local private sector airlines. ‘In principle, aviation does not support carbon taxes. We believe that in a world where aviation is such an active facilitator of travel, communication and bringing people together, the introduction of carbon taxes is intended to discourage and effectively shrink air transport,’ Zweigenthal said. The Association of Cementitious Material Producers executive director Dhiraj Rama expressed grave concern about the consequences of implementation of the Bill in the current economic climate. Sasol vice-president of regulatory services Johan Thise also noted concern about regulatory uncertainty and asked for a postponement of the promulgation of the tax until this had had been sorted out. Opposition to the tax was also expressed by Business Unity SA, the South African Iron and Steel Institute, Black First Land First, Sibanye Stillwater, Arcelor Mittal, the Chemical & Allied Industries Association, and the Organisation Undoing Tax Abuse.