NOW FOR ANOTHER TAX ON MOTORISTS & FLEETS – TYRES

It goes without saying that the REDISA (Recycling and Economic Development Initiative of SA) levy on tyres, indicated at R2.30 for every kilogram of tyre purchased, is another tax on the motorist and transport industry in SA. The reason, we are told, is to introduce a tyre recycling initiative which will (a) create jobs and (b) reduce waste tyres piling up in the environment, both of which are great reasons on the face of it, but what lies behind the plan?

First of all, there is a cost to the road user. Secondly, the Retail Motor Industry body (RMI) have lodged a legal challenge to the plan saying this was initially devised by the industry by their Tyre Dealers association and was then ‘hijacked’ by a previous industry employee to manage the process through a new organisation. More worrying is the fact that this is a regulated (government backed) levy, being passed on to a private organisation, to manage a process which does not have the support of the tyre industry association.

There is a view that recycling initiatives of this nature should be self-funding i.e. no add-on cost to the consumer. That the recycling of tyre should be a free standing business venture and that market forces should be allowed to play out. So why has this not been the case to date? Surely there is a business case and need for content (in whichever shape or form) of used tyre product? And if so, what will happen when a new tyre recycling organisation approaches the tyre dealers to ‘take their used tyres for recycling at zero cost (i.e. no levy)’? Will this compel the tyre dealer to save costs for the consumer and break the law by refusing to participate in the government regulated plan?

SAVRALA raises its concern when regulations do not have the backing of industry and urges alternate / more appropriate mechanisms be sought through deeper engagement by all involved. Top of mind should always be the consumer and the solutions sought, should ultimately not cost the overstretched tax payer one Rand more, lest this be seen as another tax (al-la-plastic bags) that will probably defeat the purpose for which it is intended, with a handful of participants getting rich at the expense of the road user.

Keri Kirsten
SAVRALA President