In Africa’s fight against climate change ATAF issues policy guidelines for carbon tax
Africa’s 54 countries contribute less than four per cent of global emissions, and yet are the hardest hit by climate change. It is therefore important that attention is paid to the continent’s efforts to respond appropriately to the challenges of climate change.
It is therefore, another shot in the arm as the African Tax Administration Forum (ATAF) issues guidelines on how carbon taxes can be implemented in the fight against climate change in Africa.
In a press release copied to Ghana Business News, ATAF says an upstream carbon tax is simple to administer and can impact both the formal and the informal economies, a point which is particularly relevant for Africa where most countries are either middle- and low-income countries.
It notes that the Carbon Tax policy brief will assist African governments in applying a carbon tax policy with holistic approach.
The brief, it explains, explores the key features in the design of a carbon tax that can meet the dual objective of raising revenues while conferring a positive effect on the environment.
According to ATAF, the brief starts with a descriptive overview of what carbon taxes are and how they may be administered at the national level, when employed either at the upstream or downstream levels. It then provides for an ample discussion of the parameters for tax rate implementation, the definition of the tax base, and revenue use considering the African context, it added.
Commenting, ATAF Manager: Country Programmes & Rapid Response, Sameera Khan, said, “Carbon taxes are amongst some of the most efficient policies in pricing carbon, particularly if employed at ‘choke points’ at the upstream level.”
Citing an example, ATAF said the application of national tax policies – such as the recently approved European Union Carbon Border Adjustment Mechanism (CBAM) – means that net exporters of covered products to the EU territory, can expect a corresponding loss in revenue accumulation ability resulting from the difference between the carbon tax imposed at domestic level (if any) and the adjustment measure employed at the border.
“The policy brief seeks to ensure that African tax authorities will be prepared to meet these changes,” ATAF said.
By Emmanuel K Dogbevi