## Carbon Tax Act, 2019 (Act No. 15 of 2019)## Part 1 : Definitions and general provisions relating to imposition of carbon tax## 4. Tax base |

(1) | Notwithstanding subsection (2), the carbon tax must be levied in respect of the sum of the greenhouse gas emissions of a taxpayer in respect of a tax period expressed as the carbon dioxide equivalent of those greenhouse gas emissions resulting from fuel combustion and industrial processes, and fugitive emissions in accordance with an emissions determination methodology approved by the Department of Environmental Affairs. |

[Section 4(1) substituted by section 91(1)(a) of the Taxation Laws Amendment Act, 2019 (Act No. 34 of 2019), GG42951, dated 15 January 2020 - deemed to have come into operation 1 June 2019 (Section 91(2)]

(2) | Where a taxpayer uses an emissions determination methodology in respect of the sum of the greenhouse gas emissions of a taxpayer in respect of a tax period— |

[Words preceding section 4(2)(a) substituted by section 91(1)(b) of the Taxation Laws Amendment Act, 2019 (Act No. 34 of 2019), GG42951, dated 15 January 2020 - deemed to have come into operation 1 June 2019 (Section 91(2)]

(a) | employing readily available statistical data on the intensity of processes (activity data) and emission factors as specified in the ‘IPCC Guidelines For National Greenhouse Gas Inventories’ (2006)); or |

(b) | employing the statistical data and emission factors as specified in paragraph (a) including country-specific emission factors, |

in respect of greenhouse gas emissions resulting from fuel combustion, and industrial processes, and fugitive emissions the carbon tax must be levied in respect of the sum of the greenhouse gas emissions of a taxpayer in respect of a tax period expressed as the carbon dioxide equivalent of those greenhouse gas emissions resulting from—

E = (Ax B)

in which formula—

(i) | "E" represents the number to be determined; |

(ii) | "A" represents the mass of any one type of the fuel expressed in tonne that is the source of the greenhouse gas emission, other than any fuel utilised for the purposes of international aviation and maritime transport; |

(iii) | "B" represents the greenhouse gas emission factor in carbon dioxide equivalent per tonne that must be determined in accordance with the formula: |

X = {[C x 1) + (M x 23) + (N x 296)] x D}/Y

[Section 4(2)(a)(iii) formula substituted by section 91(1)(c) of the Taxation Laws Amendment Act, 2019 (Act No. 34 of 2019), GG42951, dated 15 January 2020 - deemed to have come into operation 1 June 2019 (Section 91(2 )]

in which formula—

(aa) | "X" represents the number to be determined; |

(bb) | "C" represents the carbon dioxide emissions of a fuel type determined by matching the fuel type listed in the column "fuel type" in Table 1 of Schedule 1 with the number in the corresponding line of the column "CO2 (KGCO2/TJ)" of that table; |

(cc) | "M" represents the methane emissions of a fuel type determined by matching the fuel type listed in the column "fuel type" in Table 1 of Schedule 1 with the number in the corresponding line of the column "CH4 (KGCH4/TJ)" of that table; |

(dd) | "N" represents the Nitrous Oxide emissions of a fuel type determined by matching the fuel type listed in the column "fuel type" in Table 1 of Schedule 1 with the number in the corresponding line of the column "N2O (KGN2O/TJ)" of that table; |

(ee) | "D" represents the net default calorific value (terajoule per tonne) of a fuel type determined by matching the fuel type listed in the column "fuel type" in Table 1 of Schedule 1 with the number in the corresponding line of the column "DEFAULT CALORIFIC NET VALUE (TJ/TONNE)" of that table; and |

[Section 4(2)(a)(iii)(ee) substituted by section 91(1)(e) of the Taxation Laws Amendment Act, 2019 (Act No. 34 of 2019), GG42951, dated 15 January 2020 - deemed to have come into operation 1 June 2019 (Section 91(2)]

(ff) | "Y" represents the number 1000; |

[Section 4(2)(a)(iii)(ff) inserted by section 91(1)(d) of the Taxation Laws Amendment Act, 2019 (Act No. 34 of 2019), GG42951, dated 15 January 2020 - deemed to have come into operation 1 June 2019(Section 91(2)]

(b) | fugitive emissions that is a number constituted by the sum of the respective numbers determined for each type of commodity, fuel or technology in respect of which the greenhouse gas is emitted in respect of a tax period which respective numbers must be determined in accordance with the formula: |

F= (N x Q)

in which formula—

(i) | "F" represents the number to be determined; |

(ii) | "N" represents the mass expressed in tonne in the case of solid fuels or the volume of each type of fuel expressed in cubic metres in the case of fuels other than solid fuels, in respect of the greenhouse gas emission; and |

(iii) | "Q" represents the greenhouse gas emission factor in carbon dioxide equivalent per tonne or cubic metres— |

(aa) | in the case of oil and natural gas that must be determined in accordance with the formula: |

[Section 4(2)(b)(iii) substituted by section 91(1)(f) of the Taxation Laws Amendment Act, 2019 (Act No. 34 of 2019), GG42951, dated 15 January 2020 - deemed to have come into operation 1 June 2019 (Section 91(2)]

X = [(C x 1) + (M x 23) + (N x 296)] x Y

in which formula—

(a) | "X" represents the number to be determined; |

(b) | "C" represents the carbon dioxide emissions of a fuel type determined by matching the fuel type listed in the column "fuel type" in Table 2 of Schedule 1 with the number in the corresponding line of the column "CO2" of that table; |

(c) | "M" represents the methane emissions of a fuel type determined by matching the fuel type listed in the column "fuel type" in Table 2 of Schedule 1 with the number in the corresponding line of the column "CH4" of that table; |

(d) | "N" represents the Nitrous Oxide emissions of a fuel type determined by matching the fuel type listed in the column "fuel type" in Table 2 of Schedule 1 with the number in the corresponding line of the column "N2O" of that table; |

(e) | "Y" represents the number 1000; and |

[Section 4(2)(b)(iii)(ee) inserted by section 91(1)(f) of the Taxation Laws Amendment Act, 2019 (Act No. 34 of 2019), GG42951, dated 15 January 2020 -deemed to have come into operation 1 June 2019 (Section 91(2)]

(bb) | in the case of coal mining and handling, that must be determined in accordance with the formula: |

X = (M x D x 23) x Y

in which formula—

(a) | "X" represents the number to be determined; |

(b) | "M" represents the methane emissions of a fuel type determined by matching the fuel type listed in the column ‘fuel type’ in Table 2 of Schedule 1 with the number in the corresponding line of the column ‘CH4’ of that table; |

(c) | "D" represents the density factor for coal mining and handling methane emissions (0.67 x 10-6 Gg/ m3 ); |

(d) | "Y" represents the number 1000; and |

[Section 4(2)(b)(iii)(bb) inserted by section 91(1)(f) of the Taxation Laws Amendment Act, 2019 (Act No. 34 of 2019), GG42951, dated 15 January 2020 - deemed to have come into operation 1 June 2019 (Section 91(2)]

(c) | industrial process in respect of a tax period that is a number constituted by the sum of the respective numbers determined for each type of commodity, fuel or technology in respect of which the greenhouse gas is emitted in respect of that tax period which respective numbers must be determined in accordance with the formula: |

P= (G x H)

in which formula—

(i) | "P" represents the amount to be determined that must not be less than zero; |

(ii) | "G" represents the mass of each raw material used or product produced expressed in tonne in respect of which the greenhouse gas is emitted in respect of that tax period; and |

(iii) | "H" represents the greenhouse gas emission factor in carbon dioxide emissions equivalent per tonne for each raw material used or product produced that must be determined in accordance with the formula: |

X = (C x 1) + (M x 23) + (N x 296) + (H x 11 900) + (T x 5 700) + (S x 22 200)

in which formula—

(aa) | "X" represents the number to be determined; |

(bb) | "C" represents the carbon dioxide emissions of a raw material or product determined by matching the fuel type listed in the column "SOURCE CATEGORY ACTIVITY/RAW MATERIAL /PRODUCT" in Table 3 of Schedule 1 with the number in the corresponding line of the column "tonneCO2/tonne product" of that table; |

(cc) | "M" represents the methane emissions of a raw material or product determined by matching the fuel type listed in the column "SOURCE CATEGORY ACTIVITY/RAW MATERIAL/PRODUCT" in Table 3 of Schedule 1 with the number in the corresponding line of the column "tonneCH4/tonne product" of that table; |

(dd) | "N" represents the Nitrous Oxide emissions of a raw material or product determined by matching the fuel type listed in the column "SOURCE CATEGORY ACTIVITY/RAW MATERIAL/PRODUCT" in Table 3 of Schedule 1 with the number in the corresponding line of the column "tonneN2O/tonne product" of that table; |

(ee) | "H" represents the Hexafluoroethane (C2F6) emissions of a raw material or product determined by matching the fuel type listed in the column "SOURCE CATEGORY ACTIVITY/RAW MATERIAL/PRODUCT" in Table 3 of Schedule 1 with the number in the corresponding line of the column "tonneC2F6/tonne product" of that table; |

(ff) | "T" represents the carbon tetrafluoride (CF4) emissions of a raw material or product determined by matching the fuel type listed in the column "SOURCE CATEGORY ACTIVITY/RAW MATERIAL/PRODUCT" in Table 3 of Schedule 1 with the number in the corresponding line of the column "tonneCF4/tonne product" of that table; and |

(gg) | "S" represents the Sulphur hexafluoride (SF6) emissions of a raw material or product determined by matching the fuel type listed in the column "SOURCE CATEGORY ACTIVITY /RAW MATERIAL/PRODUCT" in Table 3 of Schedule 1 with the number in the corresponding line of the column "tonneSF6/tonne product" of that table. |

[Section 4(2)(c)(iii)(bb) to (gg) substituted by section 91(1)(g) of the Taxation Laws Amendment Act, 2019 (Act No. 34 of 2019), GG42951, dated 15 January 2020 - deemed to have come into operation 1 June 2019 (Section 91(2)]