The positive and negative effects of Carbon Tax implications on Entrepreneurship and SMEs

Abstract

Carbon in the atmosphere has increased from a historical average of 275 parts per million in the first half of the 20th century to approximately 400 parts per million. Moreover, this rate is increasing by approximately two parts per million annually (Mbadlanyana, 2013:90). This rate is higher than ever previously recorded within the planet's history, resulting in disastrous impacts both on people and the environment. Since carbon tax is new to South Africa, and as with any tax, it is expected that it will have an impact on both entrepreneurships and SMEs, which may be either positive or negative. This study seeks to determine exactly what this impact is on these organizations. This study has an objective of assessing the impact of Carbon tax on entrepreneurship and SMes in South Africa. The carbon tax has been a contravention tax, and purpose of the study is to explore how it affects the business environment, and explore any possible opportunities that arise from the tax implementation. This specific study uses a mixed research model, allowing both quantitative and qualitative data to be considered in the analysis. The purpose of selecting the mixed research model was to allow opportunities for subjective data (through participant opinions) to be used to support the objective data as far as carbon tax is concerned. The study also presented an opportunity for viewpoints and perspectives to be provided regarding the implications of carbon tax. This option is the most effective for this study because it provides the opportunity for comparison of results based on the objectives established in the introductory chapter. As a result of the data analysis, the researcher was able to offer conclusions regarding majority viewpoints on carbon tax implementation and its implications. The major goals for this study are threefold: the exploration of the relationship between the carbon tax and entrepreneurs/SMEs; the exploration of the ability/plans of entrepreneurs/SMEs of taking advantages of opportunities related to the Carbon Tax Bill; and exploring the negative aspects of the Carbon Tax Bill as it impacts entrepreneurships/SMEs. In this case, the quantitative data was instrumental in the understanding of the impacts on the different business types-entrepreneurships and SMEs. The study shows that there are positive relationships regarding entrepreneurships and SMEs in relation to carbon tax.