Carbon Tax, 2019 Draft Documents – Comment due On 04 December, the South African Revenue Service (Sars) published draft regulations on Trade Exposure Allowance, and on Greenhouse Gas (GHG) Emissions Intensity Benchmarks, in terms of the Carbon Tax Act, 2019, on which comment is due by 17 January 2020. According to Sars’ explanatory note, the Trade Exposure Allowance draft regulations give effect to the sector-based allowance and provide a list of sectors and subsectors and their respective trade exposure allowances. The regulations also outline an alternative approach to calculating the trade exposure allowance for companies. In addition, they aim to assist companies that potentially face competitiveness pressures whilst the performance allowance seeks to encourage firms to reduce the carbon intensity of their production processes relative to their peers and promote the competitiveness of local products. On 02 December National Treasury said it would ensure that the final regulations would be published in the Government Gazette for the first quarter of 2020, to align the regulations with the Greenhouse Emissions reporting period of the Department of Environment, Forestry and Fisheries. According to National Treasury, the Carbon Tax is an integral part of Government’s package of policy measures to mitigate climate change as outlined in the National Climate Change Response Policy, National Development Plan and its Nationally Determined Contribution commitments under the 2015 Paris Agreement. National Treasury intends to introduce the Carbon Tax in a phased manner at a relatively low rate initially. This phased introduction will allow businesses time to make the necessary structural adjustments to their production processes and practices and to ensure a just transition to a low carbon, climate resilient economy. Prohibited and Restricted Goods Policy Sars has released its “Customs External Policy Prohibited and Restricted Goods”, effective from 13 November. The Policy’s “Summary of Main Points” is (a) The importation and exportation of certain goods are subject to controls required by Other Government Agencies (OGAs). (b) Sars is mandated to control prohibited and restricted goods on behalf of OGAs. (c) The controls are exercised through the following: (i) The status of goods must be declared either as new, used or second hand; (ii) Quota requirements; (iii) Permits; (iv) Authority; (v) Certificates; or (vi) Labelling requirements. (d) The details of the prohibitions or restrictions are contained within the ‘Prohibited and Restricted Imports and Exports List’, which is published on the Sars website. (e) The document is applicable to commercial goods. Diesel Rebate Court Judgement Sars has announced its judgement of 29 November in the case of the Commissioner for Sars versus Langholm Farms (Pty) Ltd. The judgement pertains to the diesel fuel rebate and the interpretation of Section 75(1C)(a)(iii) of the Customs and Excise Act,1964. According to the interpretation of the court, Section 75(1C) (a)(iii) of the Act, 1964 means that a taxpayer can only claim for the diesel fuel stored and used on its own premises. The court commented that the declaratory orders previously granted had been on a mistaken view of the law. The application was dismissed with costs.