40 companies sent in their representatives to a forum held by Environment and Water Resources Minister Masagos Zulkifli slamming him that he doesn’t know what to achieve with the new Carbon Tax.
The CEO of energy company PacificLight, Yu Tat Ming, voiced out saying that the Carbon Tax is a flat tax that has no greenhouse emission reduction benchmark to meet:
“If it is targeted based on a certain benchmark, it can be more differentiating. Any marginal carbon will attract heavier tax. That will encourage industries to take action, to meet the target. But without the clear visibility of a benchmark, we don’t know what we are trying to achieve. How much should we improve in order to enable the Government to achieve the target?
Because for any improvement, there has to be an investment made. And as a commercial entity, we need to calculate the return on investment.”
A few other CEOs stepped up in unison slamming the Minister’s proposed Carbon Tax:
“The tax should be charged based on “how far you are away” from the benchmark. If you charge a flat tax across all carbons, there is very little incentive and margin to improve energy efficiency…If the tax fails to reduce emissions, the Government will end up increasing rates across the board, pushing us down the path of international un-competitiveness. Singapore’s neighbours do not impose carbon tax.”
Minister Masagos Zulkifli, apparently did not listen, and responded blindly upon the official line:
“While the Government has studied various systems, the carbon tax has to finally nudge our companies to transform towards a low-carbon economy. This is not an easy thing to design because we must not kill our competitiveness…Nevertheless, the Government will ensure that companies do not pass the wrong amount of cost to consumers by encouraging competition and giving consumers a choice. As for the companies, the Government will make the process of determining the carbon tax price transparent to them.”
The new carbon tax is expected to be announced next month in Budget 2018, and increase utility bills by an average of S$3.30 a month for each household.