Finance Minister Trevor Manuel should scrap the two-cent-a-unit "green" tax on electricity he announced in this year's budget, the Cape Town Regional Chamber of Commerce and Industry said on Tuesday.

Chamber President Gerald Wolman said the tax was introduced as an incentive to make people use less electricity, but in view of the recent tariff increases, its effect would be marginal at best.

"If the 35 percent tariff increases implemented by the municipalities do not make people rethink the way they use electricity, Mr Manuel's extra two cents a unit will certainly not do so.

"There is no point in introducing this tax now," he said.

Extra VAT earnings from the higher electricity prices would replace the revenue from the new tax, so the Treasury did not need the money.

Sapa