CO2 tax hits motorists
2010-09-01 09:28
Author: Carina van Wyk
Johannesburg - South Africans will be paying significantly more for new cars from Wednesday.
The new "green" tax, which applies to new passenger vehicles which release more than 120g of carbon dioxide (CO2) per kilometre, will come into effect on Wednesday.
For each extra gram of CO2/km, the car's price will increase by R85.50 (R75 plus VAT). The National Association of Automobile Manufacturers of South Africa (Naamsa) said this would mean an oerall average price increase of 2.5%.
The national treasury said the environmental tax was based on the principal of "polluter pays" and was intended to change car-buyers' behaviour which is why the treasury and industry will recommend that dealers indicate the CO2 tax separately on invoices.
Industry response
It is still unclear whether buyers will have to pay the full amount or whether automakers and dealers will absorb part of it.
"The tax will be transferred to the consumer," said Gary Ronald, spokesperson for the Automobile Association, on Tuesday.
Leo Kok, speaking for Toyota SA, said his company was looking at ways to ease the burden on vehicle buyers. Toyota wanted to try to absorb part of the tax, especially for people buying environmentally friendly cars.
Guy Kilfoil, head of communication at BMW SA, earlier told Sake24 that, due to the competitive nature of the market, manufacturers could not transfer the increased sales prices to consumers, because they would be "pricing themselves out of the market".
According to Kok, South Africa's fuel was not yet clean enough to be used in highly environmentally friendly cars. Corollas which complied with strict European (Euro 5) standards were assembled in Toyota's Durban plant then exported.
These cars' engines cannot function optimally with the sulphur content of local fuel, he explained.
Impact
Ronald said it was difficult to estimate the potential effect of the new tax but he believed it might affect the type of vehicle people bought "but I don't think the effect will be significant".
CO2 tax on double-cab vehicles will only come into effect in March 2011 to give manufacturers and importers time to determine their CO2 emissions.
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