September 2010

Government’s carbon emissions tax is set to come into effect on 1 September 2010. The South African Vehicrned about the broader impact that this tax will have on its members and the general road user.

It has been said that South Africa is one of the few African countries that could contribute to mitigating climate change, a goal that is naturally shared by responsible businesses and individuals. The implemenle Rental and Leasing Association (SAVRALA) adds its voice to those major stakeholders who are concetation of a CO2 tax is therefore understandable in the global race to reduce carbon emissions. But – SAVRALA seeks answers from Government to a variety of concerns:

CO2 tax will be levied on new vehicles. What is being done about the large assortment of old – many unroadworthy – vehicles that continue to spew emissions into the environment unchecked?

The tax is a flat rate CO2 emissions tax. The tax will add anything from R5 000 to R20 000 to the cost of a new vehicle; a fact that threatens to have a negative impact on the already ailing motor industry. Furthermore, a flat rate tax does not take into account the fact that vehicles that travel less emit less carbon than those that are on the road day in and day out.

The tax will be levied at R75/gram of carbon dioxide emitted per kilometre for each gram/kilometre above 120 grams per kilometre. Only 0.4% of passenger cars sold fall into this environmentally friendly category. This problem is further compounded by the fact that car manufacturers cannot produce or import vehicles with less-polluting engines as the fuel available in South Africa is not yet clean enough to sustain them.

This tax will raise a potential R1-billion a year in revenue for the National Treasury. Are there plans in place to guarantee that the revenue earned from this environmentally-motivated tax will in fact be spent on environmental issues?