With the imminent introduction of Carbon Tax, it is important to know how this will affect your business. While your business may not be directly affected by the tax, your suppliers may well have to pass on additional costs incurred as a result of it. So, let’s explore who and what will be subject to the tax.
Persons subject to tax:
Liability for the tax arises for every entity that conducts an activity and emits GHG emissions above the threshold for the following activities:
the Energy Sector (such as fuel combustion activities, petroleum refining, civil aviation, pipelines etc.).
the Industrial Processes and Product Use Sector (such as cement production, lime production, Nitric acid production, ceramics, Refrigeration and Stationery Air Conditioning).
the Agriculture, Forestry and other Land Use Sector (such as cattle, forest land, harvested food products).
the Waste Sector (such as managed waste disposal sites, wastewater treatment and discharge).
The sectors listed in 3 and 4 above will be exempt during the first implementation phase (up to 2022), due to measurement difficulties.
Greenhouse gases covered:
The Carbon Tax covers greenhouse gas emissions including carbon dioxide, methane, nitrous oxide, perfluorocarbons, hydrofluorocarbons and sulphur hexafluoride.
The tax base comprises the sum of the greenhouse gas emissions of a taxpayer in respect of a tax period – expressed as the carbon dioxide equivalent (CO2-eq) of those greenhouse gas emissions resulting from fossil fuel combustion, emissions from industrial process and product use and fugitive emissions – all of which are determined in accordance with the emissions factors determined in accordance with a reporting methodology approved by the Department of Environmental Affairs.
What is fairly certain is items such as the fuel price will be affected. It is anticipated that the tax will add an additional 9 cents per litre to the petrol price and 10 cents to the diesel price. So be aware of the sectors affected and assess how this could impact your pricing from suppliers.
Global Environmental Health
Recently released, the United Nations’ global assessment of environmental health is grim: biodiversity declining at an unprecedented rate, one million species at risk of extinction, human populations in jeopardy if the trajectory is not reversed.
The report goes on to note the biggest culprits as:
Turning forests, grasslands and other areas into farms, cities and other developments. About 3/4 of Earth’s land, 2/3 of its oceans and 85% of crucial wetlands have been severely altered or lost, making it harder for species to survive.
Overfishing the world’s oceans with 1/3 of the world’s fish stocks overfished.
Permitting climate change from the burning of fossil fuels to make it too hot, wet or dry for some species to survive. Almost half of the world’s land mammals — not including bats — and nearly a quarter of the birds have already had their habitats hit hard by global warming.
Polluting land and water. Every year, 300 to 400 million tons of heavy metals, solvents and toxic sludge are dumped into the world’s waters.
Allowing invasive species to crowd out native plants and animals. The number of invasive alien species per country has risen 70% since 1970, with one species of bacteria threatening nearly 400 amphibian species.
What has this news got to do with SMEs?
SMEs have much greater agility to drive innovation and change than large corporates. Actions can be small or large – eliminating use of plastics; promoting recycling and use of sustainability sourced products; promoting ethical consumption within business; encouraging teams to reconnect with nature; diversification of business through consulting activities in sustainable development; and focus on protection of local biodiversity by setting up regional reforestation associations are some examples.
It’s not too late to reverse the trend and it starts with us.
The Ramaphosa Effect
The outcome of the national elections is a clear indication that, while the ANC lost regional support, many voted in effect for Ramaphosa nationally. This gives the President the mandate he requires to put his reformist policies in place.
The following extract from a post-election Business Unity South Africa (BUSA) media statement clearly details the path we need to follow:
Economy most pressing task
Credible Cabinet key
Structured engagement crucial
Economy and Cabinet:
An aligned, focused, compact and capable Cabinet will enable speedier decision making and implementation to address the country’s economic challenges. Cabinet ministers, directors-general and other key staff in the economic and justice clusters need to be appointed on the basis of competence, capability, experience and integrity. These capabilities will be critical to oversee an economic turnaround and ensuring justice is served in the quest to combat corruption.
Investors require key interventions, including: swift implementation of comprehensive reform of state-owned entities, with Eskom at the top of the list; addressing public finances, particularly the fiscal deficit and rising public debt; eliminating barriers to investment by ensuring policy certainty; and addressing the low economic growth rate. Future engagement Business stands ready to partner with the newly elected administration. BUSA believes it is imperative that there be a structured engagement mechanism to drive forward the key priorities for investment, growth, employment and social compacting.
South Africa has tremendous potential and we need to see positive steps taken by government to create an enabling environment for business to invest and stimulate growth for our fragile economy. The next three months are critical to our future in terms of sending a clear message not only to the local business market, but internationally as well.
There is one truth about change: It’s going to happen. Technology, consumer demand, globalization, competition, and the economy – all of these factors contribute to the need for every business to move with the times in order to survive.
Companies that want to grow, have to change to remain viable and continue growing. That’s the very nature of growth – it brings about and demands change.
THE 7 STEPS TO NAVIGATING THE CHANGE MAZE:
Accept That Change happens – Change in management, change in suppliers, change in hiring policy, change in communication, change in product or change in business strategy. Think about how many times you’ve already experienced change in your working life. Sometimes it’s welcome, sometimes it isn’t.
Anticipate change – Anticipating change is the beginning to managing change strategically. Fear typically keeps us in the dark when it comes to change.
Monitor change – the next step to navigating the course toward change is to constantly monitor your business.
Adapt to change quickly – Too often we wait too long, and change drives our businesses instead of us driving change.
Change – At the end of the day we just have to buckle up and change or get left in the dust.
Enjoy change – But why just do it when we could enjoy doing it? Change does not leave you with no power or control unless you let it.
Be ready to change quickly and enjoy it again and again – As we stated at the beginning of this article, change is inevitable. Growth – whether it is personal, business or even biological – inspires change. So, if you intend on having a growing business, you have to be prepared for it. If you have accepted that change happens, anticipated the change, monitored it, adapted to previous changes well and enjoyed the adventure, you are well on your way to handling the next change and the next and the next