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Carbon tax, which first came into effect in June 2019, is set to go up by 5.9% this financial year and generate R1.75 billion over the next few months.
Announcing this in his Budget speech, Finance Minister Tito Mboweni said the tax would be complemented by more focused spending in fighting climate change.
According to the Carbon Tax Act, the levy must be increased annually based on the consumer price index inflation rate for the preceding tax period, plus two percentage points for the first phase of the carbon tax up to December 2022.
In another measure aimed at protecting the environment, the National Treasury said it plans to consult on extending the current levy on plastic bags to all single-use materials, such as plastic straws, utensils and packaging, in changes which will be implemented in 2021.
Government proposes to raise the plastic bag levy from 12 to 25 cents per bag effective 1 April 2020.
The plastic shopping bag levy was introduced by then-minister of environmental affairs and tourism Vallie Moosa in 2004, as a mechanism to manage the problem of plastic bags. The current levy will be reviewed, including a clarification of the tax treatment of compostable bags.
Government also intends to consult with affected industries on the introduction of export taxes on scrap metal, which could replace the current price preference system.
This follows a Budget proposal to introduce export taxes on ferrous metals, in a move aimed at improving the availability of quality scrap metal at affordable prices for domestic foundries and mills.
They are set to apply to ferrous metals at the rate of R1 000 per tonne, aluminium at R3 000 per tonne, red metals at R8 426 per tonne, and other waste and scrap metals at R1 000 per tonne.
"Consultation will begin today, to be concluded by the end of May 2020, for consideration in the annual tax bills," according to Budget documents.
The US in 2018 imposed a 10% ad valorem tariff on imports for aluminium products and a 25% ad valorem tariff on imports for steel. South Africa is one of the countries which were not granted an exemption on the steel and aluminium tariffs, despite strong government lobbying.
