Audit firm KPMG International on Wednesday named South Africa as the 13th most active country out of 21 major global economies using tax as a tool to drive sustainable corporate behavior and achieve green policy goals. This was revealed in the first KPMG Green Tax Index made available on the audit firm\'s website. \"The KPMG Green Tax Index uses a proprietary scoring methodology to rank countries according to the extent to which they use their tax systems to drive sustainable business behavior and achieve green policy goals,\" the report said. KPMG has created the Green Tax Index to increase awareness of the complex, fragmented and rapidly evolving green tax landscape worldwide. \"It aims to encourage companies to explore the opportunities of green tax incentives, and to reduce exposure to green tax penalties.\" The rankings provide an indication of which countries are most active in using green tax incentives and penalties to drive sustainable corporate behavior and achieve green policy objectives. Singapore, Finland, Germany, Australia, Brazil Argentina, Mexico and Russia come after South Africa. The United States, Japan, Britain, France, South Korea and China are the top countries. South Africa ranks third on water efficiency, third on pollution control and ecosystem protection, fourth on energy efficiency and sixth on carbon and climate change. \"It should also be noted that South Africa has many green tax instruments in the pipeline; soon to be implemented is the proposed carbon tax and the energy efficiency tax incentive,\" KPMG said. \"Therefore, it is a strategic imperative for companies to understand the green tax environment and its implications for their business.\" The firm said green tax could have an intrinsic affect on corporate investment decisions, especially for multinational businesses, and could make or break projects by cutting costs, increasing efficiency, driving innovation, and enabling transformation. According to KPMG, South Africa\'s Section 121 Tax Allowance Incentive is designed to encourage the development of major manufacturing projects in the country and offers support for both capital investment and training. \"While not specific to energy efficiency, this tax allowance is directly relevant because energy efficiency improvements are one of the key criteria on which projects are assessed due in part to the current and future energy supply constraints the country faces, \" said the report. To qualify under this criterion, projects must demonstrate a minimum 10 percent energy saving sustained for a minimum of four years. The incentive offers a tax allowance of between 35 percent and 100 percent up to a maximum of 97 million U.S. dollars for greenfield projects with \"preferred\" status. Some 13 projects have been approved so far under Section 121 with a total investment value of approximately 2.4 billion dollars. South Africa has also announced, but not yet put into effect, an Energy Efficiency Savings Tax Allowance (Section 12L, Income Tax Act) which proposes a tax deduction based on the amount of energy saved by the taxpayer in the year of assessment. The deduction is proposed to be calculated at 0.05 dollars per kilowatt hour of energy saved. The date of introduction is not yet known but it is widely expected to take effect in 2015.