Carbon Taxes Are A Complicated Business
Clearly, no single nation is going to tackle climate change alone. Which is why heads of state from around the world met ahead of the Paris climate talks last month to urge countries and companies to put a price on carbon. However, pricing carbon sounds fine in principle, but how do you do it in practice? Different countries have chosen different ways to go about this, from straight taxes on carbon emissions to more complex market-based mechanisms. And nobody really knows yet what the optimum carbon pricing system should look like, including me, because there just isn’t enough data to assess the various schemes. But I’m going to stick my neck out and say that the ideal system won’t look like South Africa’s proposed carbon tax, the draft legislation for which I had the pleasure of reading the other day as part of another project. All I can say is, if your company is likely to be caught up in the carbon tax, and you’ve been given the thankless task of working out your firm’s carbon tax liability, you’d better brush up on your math!
For more information on this, and other topical international tax matters, please visit: https://www.cchgroup.com/roles/corporations/international-solutions/research/global-tax-weekly-a-closer-look