Tax on car fumes ‘unfair’

2010-08-07 00:00

A “CARBON tax” imposed on the sale of new vehicles will ensure that an often neglected issue — the environmental impact of motor vehicles — is placed back on the public agenda.

Or so it seems at first glance.

Described as progressive by supporters of the legislation, the motor industry has labelled it a hasty and unfair move.

Industry role-players feel that their “hands are tied” as cleaner fuels that help produce lower emissions are not available in South Africa.

The National Association of Automobile Manufacturers of South Africa (Naamsa) estimates that the additional cost to consumers could amount to about 2,5% on average — effectively adding several thousands of rands to the price of new vehicles.

Dale Southern, MD of Key Pietermaritzburg, described the proposed penalties as severe.

He told Weekend Witness that the tax will hit the industry as well as the economy, particularly the transport and delivery sector.

Leo Kok of Toyota South Africa Motors said the tax will lead to a general increase of about 2% on new vehicles. The motor industry believes that the market cannot afford such a penalty.

“We manufacture engines in Durban that comply with all Euro fuel standards. These vehicles are exported to markets in Europe, but cannot be introduced in South Africa, because we do not have access to the same fuel,” Kok explained.

He argued that the tax is harsh when compared with similar taxes in countries such as Germany.

The Treasury this week told parliament’s standing committee on finance that it will go ahead with the legislation, adding that while the tax will result in higher new vehicle prices, it will also appeal to the public’s conscience when it comes to “green issues”.

Reports indicate that the industry is also upset over the inclusion of double cabs and small bakkies as passenger vehicles because they are usually classified as light commercial vehicles.

Motoring columnist Alexander Parker noted this week that the tax “is a poorly disguised wealth tax aimed at motorists and small businesses”.

Naamsa president David Powels on Thursday accused the Treasury of reneging on an understanding that the extension of taxes to new light commercial vehicles would only follow developments in the European Union — planned for 2014 and beyond.

The tax will undoubtedly dent already fragile industry sales.

Several new vehicle dealers said that certain Chinese-manufactured vehicles, which have older engine technologies and are less efficient, could bear the brunt of the legislation.

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