He argued that failure to exempt airlines from the yet to be effective tax would reduce the return on investment for taxpayers from state-owned airlines SA Airways and SA Express and reduce the return on investment for local private sector airlines.
He said that a regulatory fragmentation between the South African and international regimes would increase the administrative burden for operators and governments and result in potential market distortions.
“The International Air Transport Association (IATA) is concerned that if domestic and international flights are subject to different regimes this will add to the administrative complexity and regulatory burden for airlines operating in SA.
The safe, orderly and efficient functioning of today’s air transport system relies on a high degree of uniformity in regulations, standards and procedures,” said Zweigenthal.
We believe that in a world where aviation is such an active facilitator of travel, communication and bringing people together, the introduction of carbon taxes is intended to discourage and effectively shrink air transport.
The new law proposes a tax rate of 120 rand ($10) per tonne of carbon dioxide equivalent and states that total tax-free allowances during the first phase until 2022 can be as high as 95%.
The new law would affect about 1,000-1,500 companies and 75% of national emissions, according to a Reuters report.
South Africa has pledged to cut emissions by almost half by 2030.