Government's carbon tax on new vehicles has " in reality, little to do with emissions. It largely serves as another revenue source for government to balance its books", says KPMG Africa Automotive practice director Gavin Maile.

Finance Minister Pravin Gordhan announced in his maiden budget speech last month that new passenger vehicles will be taxed based on their certified carbon dioxide emissions at R75 per g/km for each g/km above 120 g/km, as from September.

This will push up the price of new vehicles by 2%, on average. Very few vehicles meet the 120 g threshold.

The local automotive industry has been largely negative about the tax, which it says will only serve to punish the consumer. The industry also laments the fact that there is no legislation forcing the production of cleaner fuel in South Africa, which will enable vehicles with higher-technology, cleaner-burning engines to be introduced to local motorists.

Maile says the fact that older-technology, used vehicles, which produce more carbon dioxide than new vehicles, will not be taxed, also raises some questions.

However, he notes that the tax seems valid in terms of the commitments the South African government made at Copenhagen to reduce its carbon footprint.