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South Africa does not have the benefit of enabling "green" fuel but it intends to introduce CO2 new vehicle taxes, the National Association of Automobile Manufacturers of SA (Naamsa) said on Thursday.
"Nowhere in the world has any country introduced a CO2 tax regime without the availability of the enabling fuel," Naamsa said in a statement.
Naamsa advocated that government should legislate and incentivise the introduction of Euro IV enabling "green" fuel in South Africa.
"This would provide quantum leap benefits in the reduction of CO2 emissions of new cars sold."
Specifically, correct fuel quality could reduce new car emissions by up to 20%.
"Moreover, improved quality fuel contains fewer harmful pollutants, notably benzene and sulphur, which would contribute to improved air quality regardless of the age or type of the vehicle," Naamsa said.
Tax added to selling price
Furthermore, the purpose of the CO2 new car tax regime was intended to influence consumer behaviour in favour of more fuel efficient, less carbon emitting vehicles and, in the process, to improve ambient air quality in the country.
However, Naamsa said the tax would not be applied at point of sale to ensure visibility to the end customer.
"The tax authorities indicated that the tax will have to be applied at point of production, in respect of locally manufactured vehicles, and point of importation in respect of imported products."
Naamsa said the tax would therefore become part of the selling price of the vehicle and would not meet the test of transparency for end customers, thus defeating the intended objective.
According to the organisation, the tax was inequitable in that it discriminated against buyers of new motor vehicles.
Discriminatory
"If government was really serious about penalising emissions (a proxy for fuel consumption) the authorities should introduce an environmental levy on all fuels, petrol and diesel."
This was the only fair way of ensuring that all vehicles were covered by the tax regime and contributed in direct proportion to usage/fuel consumption/vehicle emissions.
"The recent OECD [Organisation for Economic Co-operation and Development] report also recommended this as a better option than taxing only new vehicles," Naamsa said.
The organisation said it intended to seek a joint meeting with the ministers of finance and trade and industry to address policy differences and to consider the need for a more logical and effective integrated approach to reducing vehicle emissions in the country.
"Ultimately, government and the industry must be part of a collaborative, constructive dialogue that shares knowledge and best practices on CO2 emissions reduction initiatives."
Add your voice to the current CO2 tax discussion
"Nowhere in the world has any country introduced a CO2 tax regime without the availability of the enabling fuel," Naamsa said in a statement.
Naamsa advocated that government should legislate and incentivise the introduction of Euro IV enabling "green" fuel in South Africa.
"This would provide quantum leap benefits in the reduction of CO2 emissions of new cars sold."
Specifically, correct fuel quality could reduce new car emissions by up to 20%.
"Moreover, improved quality fuel contains fewer harmful pollutants, notably benzene and sulphur, which would contribute to improved air quality regardless of the age or type of the vehicle," Naamsa said.
Tax added to selling price
Furthermore, the purpose of the CO2 new car tax regime was intended to influence consumer behaviour in favour of more fuel efficient, less carbon emitting vehicles and, in the process, to improve ambient air quality in the country.
However, Naamsa said the tax would not be applied at point of sale to ensure visibility to the end customer.
"The tax authorities indicated that the tax will have to be applied at point of production, in respect of locally manufactured vehicles, and point of importation in respect of imported products."
Naamsa said the tax would therefore become part of the selling price of the vehicle and would not meet the test of transparency for end customers, thus defeating the intended objective.
According to the organisation, the tax was inequitable in that it discriminated against buyers of new motor vehicles.
Discriminatory
"If government was really serious about penalising emissions (a proxy for fuel consumption) the authorities should introduce an environmental levy on all fuels, petrol and diesel."
This was the only fair way of ensuring that all vehicles were covered by the tax regime and contributed in direct proportion to usage/fuel consumption/vehicle emissions.
"The recent OECD [Organisation for Economic Co-operation and Development] report also recommended this as a better option than taxing only new vehicles," Naamsa said.
The organisation said it intended to seek a joint meeting with the ministers of finance and trade and industry to address policy differences and to consider the need for a more logical and effective integrated approach to reducing vehicle emissions in the country.
"Ultimately, government and the industry must be part of a collaborative, constructive dialogue that shares knowledge and best practices on CO2 emissions reduction initiatives."
Add your voice to the current CO2 tax discussion
