Isramart llc: Namibians not to pay SA carbon tax

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Isramart llc news:

The Ministry of Finance is cautioning Namibians buying new vehicles to make sure they do not pay the South African carbon emission tax on the purchase price.

A statement by the Ministry of Finance Permanent Secretary, Ericah Shafudah, says it has already engaged local vehicle traders to ensure that the emission tax is not included in the purchase price of vehicles sold in the country.

“They should ensure that the incidence of the South African CO2 emission tax is not borne by Namibian buyers,” Shafudah says. Vehicle dealers can do this by negotiating terms of trade with their South African sources.

Buyers are also encouraged to make personally sure the general purchase price does not include such tax.

South Africa introduced the carbon emission tax on luxury and four-wheel drive vehicles from the beginning of this month.

Next year, the tax would be broadened to include passenger cars as well as pick-up and double-cab pick-up vehicles.

The carbon emission level of the car model determines the additional tax money that buyers have to pay.

Rough calculations indicate that buyers could fork out as much as between N$14 000 and N$25 000 in addition to the normal selling price.

Levies or taxes such as CO2 emission tax are national revenues and are not deposited in the SACU (Southern African Customs Union) common revenue pool, as is the case with excise duties on fuel, tobacco and alcoholic beverage products.

Shafudah explains that in the case of environmental levies, including CO2 emission tax, the South African customs and excise rules stipulate that where a new vehicle is exported to any of the SACU member states, including Namibia, from a customs and excise warehouse, the vehicle must be removed in bond and the normal bonded rules apply.

“In other words, national levies and taxes are not to be included in the export price,” says Shafudah.

Where a new vehicle is exported from duty-paid stocks, a refund or a set-off system in the quarterly accounts of the South African authorised dealer applies.

“Namibian vehicle dealers and traders are therefore again requested to engage their sources in South Africa to ensure that their Namibian stock does not include the CO2 emission tax,” says Shafudah.

Initial reaction by the Namibian motor vehicle dealers was ambiguous, with some dealers indicating that they would pass on the tax to Namibian consumers, while others indicated willingness to engage their South African manufacturers on the matter.

The problem however is that negotiations would be protracted, with some dealers expressing fears of having CO2 emission tax on the price in the period of negotiations.

Shafudah says the Commissioner for Inland Revenue at the finance ministry circulated a memorandum to vehicle traders and dealerships as early as September 01 not to include emission tax in vehicle prices.

The tax applies to all sports utility vehicles such as Land Rover, Mercedes-Benz ML Class, the BMW X Class, Range Rover, Nissan Frontier and Toyota Prado.

Vehicles with much higher carbon dioxide emissions would be charged between 0,6 percent and 4,1 percent of the total price, with the percentages based on how much CO2 the vehicle emits.

In addition, as of April next year, the South African treasury will also levy carbon tax on all light commercial vehicles and four-wheel drives such as Nissan Navara, Toyota double cab and the GWM Steed range.