‘Carbon tax would paralyse road transport industry’

Carbon tax laws mooted by the National Treasury as a means of raising funds for social services in the country could paralyse South Africa’s transport industry. Road Freight Association CEO Sharmini Naidoo said the carbon tax laws, according to a discussion paper, could hurt South Africa’s transport industry, threaten the livelihoods of small businesses and result in consumers paying higher prices for services. “We strongly feel that the road freight industry will be severely prejudiced by the introduction of any carbon tax as operators are currently paying for “clean fuel” but are the recipients of “dirty fuel” and the oil companies are reaping the benefits without being penalised,” she said. Carbon taxes came into effect for passenger vehicles last September and for light commercial vehicles in March. “We understand that Treasury has commissioned an economic impact study on the effect of the proposed carbon taxes and would like to request that the results of the study be made available to the public for comment.” Naidoo said freight operators that took part in a Carbon Disclosure Project found that, depending on fleet sizes and fuel consumption, they would be expected to pay around R24 million in carbon taxes. “This would have to be passed onto consumers as no company would be able to absorb taxes of this nature, thereby exacerbating the inflationary impact and diminishing future growth potential.” Furthermore, Naidoo said, according to RFA calculations, a tax of R100 per ton of carbon would result in an increase in diesel of 26.3 cents which amounts to a 4% increase in fuel costs and for a large transporter could amount to about R63 million. “Transport operators are already faced with rising costs and this would have a serious impact on the cost of logistics which would render road transport uneconomical.”