Carbon Tax Phase Two & Tax Treatment of Collective Investment Schemes

The National Treasury has published discussion documents and policy proposals on phase two of the carbon tax and the tax treatment of collective investment schemes.

Phase two of the carbon tax

In the 2024 Budget, government announced its intention to publish a carbon tax discussion paper for public comment. This paper puts forward proposals on phase two of the carbon tax design from 2026 to 2035 for consultation, considering South Africa's NDC commitments. The discussion document includes proposed adjustments to the basic tax-free allowance, carbon offsets, the electricity levy, the renewable energy premium and the energy efficiency savings tax incentive.

Stakeholders are invited to submit written comments on the draft proposals contained in this paper to [email protected].  After the public consultation process is concluded, the draft proposals will be revised to consider public comments and announcements will be made in the 2025 Budget. The closing date for comments is close of business on 13 December 2024.

The tax treatment of collective investment schemes

This discussion document stems from a statement in the 2020 Budget Review that National Treasury will undertake a review on the income tax treatment of amounts received by portfolios of collective investment schemes. In 2018, amendments were proposed in the Taxation Laws Amendment Bill to provide certainty on when these amounts should be treated as revenue instead of capital, which would impact the tax treatment of those amounts. After consultations, government opted to withdraw the proposed amendments to allow additional time to engage with industry to find solutions that will not negatively affect roleplayers.

This document investigates the policy considerations of the taxation of collective investment schemes under section 25BA of the Income Tax Act, 1962- and puts forward various policy options.

Stakeholders are invited to submit written comments on the draft proposals contained in this paper to [email protected] . After the public consultation process is concluded, the draft proposals will be revised to consider public comments and announcements will be made in the 2025 Budget. The closing date for comments is close of business on 13 December 2024.

Find here: Media Statement: Publication of Discussion Documents for Public Comment
                  Phase Two of the Carbon Tax
                  The Tax Treatment of Collective Investment Schemes