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To: LoneClone who wrote (26272)	9/23/2008 9:33:10 AM
From: LoneClone	Read Replies (1) \| Respond to of 193686

New electricity levy for miners Ruan Jooste Posted: Mon, 22 Sep 2008 miningmx.com [miningmx.com] -- Many businesses which have had to incorporate Eskom rate hikes and the expense of generators into already tight budgets might have to make additional room for a proposed environmental levy on electricity, to come into effect on October 1 2008. Those which qualify will also have the additional burden of licensing themselves as customs and excise-manufacturing warehouses, with monthly administration to follow. The South African Revenue Service (Sars) has published draft legislation for comment on the new levy. The legislation is aimed at Eskom and various municipalities. However, companies that make use of large generators such as mining companies will also be liable for the new tax, said Hettie Koekemoer, an assistant tax manager at PricewaterhouseCoopers. A number of junior platinum companies are talking about installing large generators to supply their projects with electricity because Eskom cannot guarantee supply for large new developments. Why the levy was introduced, with these consumers already drowning in economical and capacity constraints, remains a mystery. Koekemoer wasn't sure and Sars referred the query to the National Treasury, which in turn was unavailable for comment. The levy will be imposed at a rate of 2c per kilowatt hour (kWh) on electricity of more than five megawatts (MW) per month. To put that in perspective: an average household consumes a monthly average of 1 000kWh. As 1kWh equals 1/1 000MWh, a household will have to increase its consumption by 5 000 times to reach the threshold. Consumers won't need to register with customs when electricity is generated from renewable sources, for example solar power, or when capacity is below 3MWh per month, said Koekemoer. "An electricity generation plant with an installed capacity exceeding three megawatts, but not exceeding five megawatts, will have to register as an electricity producer, but no levy will be charged," she said. Koekemoer said licensed electricity producers will have to submit accounts, supporting documents and payment 30 days after the end of each month. No losses borne in the generation process, electricity exported from South Africa or appropriated for own use will be allowed as a deduction from the total electricity accounted for. "The process to register a customs- and excise-manufacturing warehouse takes time and also requires financial guarantees to be lodged. This process should thus be commenced as soon as possible," she said.