South Africa Ranks 13th In World For Using Taxes To Advance Green Goals; Only Country In Africa On Index

South Africa Ranks 13th In World For Using Taxes To Advance Green Goals; Only Country In Africa On Index

South Africa ranked 13th overall on the Green Tax Index, a list of 21 countries around the world most active in using taxes as a tool to drive sustainable corporate behavior and achieve green policy goals, according to Swiss-based KPMG International.

The only African country to make the top 21 overall on the Green Tax Index, South Africa ranked 13th in this first-ever index, launched this week in Shanghai at the 2013 KPMG Asia Pacific Tax Summit.

South Africa ranked immediately after Canada (No. 12) and ahead of Singapore (No. 13). The No. 1-ranked country overall was the U.S., followed by Japan, the U.K. and France. China ranked No. 6, Mexico, No. 20 and Russia, No. 21.

The Green Tax Index is a tool created by international audit, tax and advisory service KPMG to explore how governments use their tax systems to respond to global challenges including energy, security, water and resource scarcity, pollution and climate change, according to a KPMG press release.

On the KPMG index, South Africa ranked ahead of Australia and Finland overall and third on water efficiency, third on pollution control and ecosystem protection, fourth on energy efficiency, and sixth on carbon and climate change, according to an article in Business Day Live.

China and South Africa are more active than the U.S. or Canada in imposing federal green tax penalties, according to key findings at KPMG. Brazil, India, Mexico and Russia are the only countries in the index that impose fewer green tax penalties than the U.S. or Canada.

South Africa is about to become the first African and second Brics country (Brazil, Russia, India, China and South Africa) to introduce a direct carbon tax, set for 2015, according to Business Day Live.

The South African government says a green economy is a way to create new jobs. But the plan does not have the country’s full support. Detractors say South Africa’s economy is not strong enough to justify the tax and will raise the cost of doing business there.

South Africa should not consider any new tax, “no matter how well intentioned,” until economic growth recovers, Democratic Alliance Finance Spokesman Tim Harris warned last week, in Business Day Live. “The Democratic Alliance will oppose any tax increases over the next three-year budget cycle and until our economy improves its growth performance.”

A newly released document by the South African Treasury proposes raising the thresholds beyond which the tax is payable, allows offsets and suggests “recycling” revenue into incentives and subsidies to invest in low-carbon technologies, according to Business Day Live.