There is little certainty in life and in particular, South African life. The statement that the only two certainties are death and taxes rings true for most of us. Tax is just a way of life. If you earn money you pay up and other than the odd dodgy business, or even dodgier politician, that’s the way it is, finish and klaar.
On the back of a tough few years, which saw economies tumble the world over, locally we weathered the storm pretty well. However the motor industry was hit hard, new vehicle sales plummeted and today they are still way down on what they were a few years ago. The consumer is also being squeezed financially to breaking point, and with Eskom’s new increased tariffs, for some the noose will tighten even further.
New vehicle prices are hitting unprecedented levels, making buying a new car harder than ever these days. As if that’s not enough, in September, consumers will expect to fork out even more for a new car, when Government pass the ad valorem carbon tax on new passenger cars.
This is both a good and bad thing; on the one hand it’s a move in the right direction , taxing vehicles on their CO2 emissions. Global warming is a problem and cars are a contributing factor, so it’s only reasonable that we pay towards helping the Government invest in renewable energy projects. Although at the rate money disappears through ‘Government channels’, this is skeptical at best.
Apparently the rate will range between 0.6% and 4.1% depending on how much fumes the type of car emits. Manufacturers specify CO2 emissions in grams per kilometer, and the new CO2 tax will add R75 per gram above the threshold of 120g/km. Seeing that only 0.4% of new cars fall under this threshold and would be exempt, it’s probably safe to say that all new cars will be affected by this new tax.
For example a brand new Suzuki Alto GL emits 133g of CO2 per kilometer so you’d pay roughly R630 on top of the purchase price, not too bad. If you were to buy a new Range Rover Sport, that emits a massive 374g/km then you can expect to pay whopping R37 000 extra for the luxury of V8 power.
The negative aspect of this new tax, apart from paying more, is that it will only be levied on new cars. What about the thousands of unroadworthy lumps of scrap on the road that belch out black and blue smoke at will? Well they’ll carry on oblivious, while new car buyers will fund their destruction.
In South Africa we don’t benefit from top quality petrol and diesel. Most overseas based manufacturers recognize this and therefore won’t introduce their most economical engines in the fear that they will fail under local circumstances; i.e. our crappy local fuel will destroy the delicate and precise nature of those engines. It would be prudent to introduce strict new laws for European quality fuel, thus allowing car manufacturers to introduce their most efficient engines to the market.
Yet, it seems like Government is putting the cart before the horse. Yes we should reduce our carbon footprint like most first world countries, but not at the expense of a select group of tax payers who can afford the luxury of a new car, yet don’t have the option to buy the most fuel efficient, economical and CO2 friendly engine available.
The moral of the story? Buy a new car before September and avoid the added expense!
* Photo by Marco Deias