South Africa’s vehicle manufacturing industry is preparing to approach the government with a request to reduce the taxes on new vehicles as part of an initiative to stimulate local demand for vehicles in the country.National Association of Automobile Manufacturers of South Africa (Naamsa) CEO Mike Mabasa said the tax on new vehicles in South Africa is too high relative to other countries.
Mabasa said the tax charged on premium vehicles in South Africa, for example, is about 42% taking into account all the different taxes.
Included in this tax basket is 15% Vat, import duties, ad valorem tax, the tyre levy, the CO2 emissions levy and the export levy, he said.
“The export levy is another form of tax because the government is now imposing it on all vehicles manufactured in South Africa that we export to other countries,” said Mabasa.
Double tax
“That is a challenge for us because we are now paying double tax. We are paying a tax on all cars exported from South Africa and also paying an import tax on these vehicles in the country of destination.”
Mabasa said Naamsa has appointed an independent group of economists to help the association understand and put together a proposal about how best to stimulate demand for vehicles in South Africa.
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