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BUDGET 2010
New vehicle owners to pay emissions tax from Sept 1
 
17th February 2010
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The proposed carbon dioxide (CO2) vehicle emissions tax, which will come into effect on September 1, would now be implemented as a specific tax and not as an ad valorem tax, the National Treasury said on Wednesday.

In the 2010/11 Budget, the Treasury highlighted that subsequent to further consultation since the tax was first announced, the tax would be converted into a flat rate CO2 emissions tax.

New passenger vehicles will be taxed based on their certified CO2 emissions at R75 per g/km for each g/km above 120 g/km.

The CO2 emissions tax was expected to encourage South Africans to move towards more energy-efficient and environmentally friendly vehicles.

Tax advisory firm Deloitte earlier this month pointed out that this tax could add between R5 000 and R10 000 to the price tag of the average new passenger vehicle.

The emissions tax has been heavily criticised by the already struggling local automotive sector, which said that it could not import or produce certain vehicles with lower CO2 emissions, given that South Africa's fuel specifications were not yet up to standard with such vehicles.

The local automotive industry has also expressed concern that the tax, which was being implemented as the country is still recovering from its first recession in 17 years, could impact on new vehicle sales and curb job creation.

Deloitte tax director Duane Newman said on Wednesday that this tax could raise R1-billion a year in revenue for the National Treasury.

Further, many have also criticised the implementation of the tax, saying that there has been no indication that the revenues to be gained from the tax would specifically be spent on environmental issues.

The CO2 emissions tax would be in addition to the current ad valorem luxury tax on new vehicles.

The National Treasury was planning to eventually extend the emissions tax to commercial vehicles also, once agreed CO2 standards for these vehicles were set.

The National Treasury noted that it was continuing to research potential options to further expand environmental levies and taxes.

Edited by: Creamer Media Reporter
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This is absolute rubbish! Why is this tax being charged at a consumer level! We have no control over the types of vehicles that get imported into this country so we take what we can get! This is just another fluke by by the elitist and government to further extort the people for their own personal gain, and they just using "Green House", if there even is such a thing as a vehicle for their corruption
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Anonymous on 01 Apr 11
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The problem is trust. The emmisions tax would be part of a solution to the problem, but we know that in SA the money made will go to corrupt government officials. We cannot trust that it will be spent on fixing the problem. Thats just a fact and is not about to change. That is why Africa will never amount to anything.
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Anonymous on 07 Sep 10
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The hack! how many environmentally friendly vehicles are here is south africa? This is one effective way to minimise growth in motor manufacturing industry. well done!
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Anonymous on 31 Aug 10
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if this is the case then we will settle for usd cars which unforrtunately might emit more co2.whoever came with this idea is very stupid and is think with their head inside of a box.
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Anonymous on 24 Aug 10
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And where will the money go? Sick and tired of taxes killing us while the fat cats are racing down the highways in a fleet of of vehicles.
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Buks on 23 Aug 10
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---"... concern that the tax ..., could impact on new vehicle sales and curb job creation". The motor industry is in trouble. According to statistics, vehicle sales are up, apparently due to vehicle owners replacing four year old vehicles. Is this the real reason? Panel beaters are crying that there is no business, many have closed their doors. Vehicle manufacturers have hiked prices on new car parts. The cost to repair an accident damaged vehicle surpasses the insured valued, even in small collision damage. As a result, more vehicles are being written off, vehicle owners loose thousands, and are forced to purchase a NEW vehicle. Not always being able to replace their old vehicle with the equivalent, but none-the-less a NEW vehicle. Hence the growth in the entry level vehicle market. It doesn't seem ethical. All in the name of keeping jobs in the vehicle manufacturing sector. ---The average vehicle owner looses thousands on an accident damaged vehicle claim and panel beaters close down and add to unemployment in the motor industry anyway. It all makes sense!? Are jobs being created in the vehicle manufacturing sector? What is the CO2 impact on the environment by passenger vehicles on the road, compared to industry in general, and Eskom and Sasol as already pointed out? Yes, why not an incentive to remove older vehicles with higher carbon emissions? I don't believe it should be government subsidized though. That would mean I would indirectly be subsidizing my own car. Vehicle manufacturers should take responsibility for clearing our roads of these vehicles. ---Why only tax “New Passenger Vehicles” now and “Commercial Vehicles” later? Aren't sales far higher in the commercial vehicle sector? Is it because little effort has been made to improve CO2 technology on commercial vehicles? Aren't there more commercial vehicle on the road, and hence contributing more to CO2 emissions? Shouldn't there rather be an incentive for commercial vehicle owners to use rail? Wouldn't the latter reduce the number of vehicles emitting CO2 on our roads? Wouldn't this also reduce congestion on our roads and hence, wouldn't passenger vehicles spend less time on the roads emitting CO2? Shouldn't taxes be imposed on industries that have made little or no significant reduction on their carbon footprint rather than targeting industries that have done so for years? Are government officials included in “South Africans to move towards more energy-efficient and environmentally friendly vehicles”? ---Supposing potential new vehicle buyers do move to more energy-efficient vehicles, will the National Treasury “raise R1-billion a year in revenue”? If by chance they do raise some money, it would be great if it were directed toward improving public transport. MORE safe, reliable and decent public transport will reduce the number of CO2 emitting passenger vehicles on the road and also economically assist the already heavily tax burdened, recession stricken, peak hour stressed, road raged, unproductive, CO2 emitting passenger vehicle owner. ---A big thanks to the National Treasury for caring about our environment.
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Joao Paulo on 17 Aug 10
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IF GOVERMENT WAS REALLY CONCERNED ABOUT THE ENVIRONMENT THEY WOULD PUT A LAW IN PLACE TO REGULATE / CONFISCATE VEHICLES THAT EMMIT SMOKE AND TOXANTS, INTRODUCE WINDFARM LICENSING FOR ECO FRIENDLY POWER - BUT HEY, NEW CAR BUYERS ARE FAR EASIER TO TARGET. THIS IS BASICALLY A LUXURY TAX , SO WHY DISGUISE IT AS SOME "ENVIROMENTAL EMMISSIONS? TAX - A SMOKE AND MIRRORS TACTIC TO FURTHER STICK THE BIG BLACK CORRUPT DICK DEEPER INTO ECONOMICALLY ACTIVE SOUTH AFRICANS!
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Anonymous on 04 Aug 10
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JUST ANOTHER WAY THE GOVERMENT WANTS TO MAKE MONEY. THEY NEED TO GET THINGS IN ORDER FIRST LIKE SAFE PUBLIC TRANSPORT. GET THE FUEL IN ORDER BEFORE TALKING ABOUT EMMISIONS TAX. THEY ALWAY WORK BACKWARDS. EISH, ANOTHER WAY TO LINE THERE POCKET
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Anonymous on 31 Jul 10
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60 million year ago the CO2 level in the atmosphere was 3500 ppm as compared with the current 360 ppm. Water is also a far more potent greenhouse gas than CO2. If government had stated that this was an earmarked tax for specific, stated enviromental purposes, then fine. This is just another general purpose tax dressed in a politically acceptable cloak.
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Peter on 27 Feb 10
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I agree with Malcolm, all vague at present. This might possibly be a 'showroom' tax.
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Andrew on 20 Feb 10
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"Further, many have also criticised the implementation of the tax, saying that there has been no indication that the revenues to be gained from the tax would specifically be spent on environmental issues." Good point. It's no secret Eskom are investing 99% of their energy into coal. If money was going into clean, renewable energy development that's positive, but is doubtful is Eskom is control.
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Andrew on 20 Feb 10
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"The CO2 emissions tax was expected to encourage South Africans to move towards more energy-efficient and environmentally friendly vehicles." I remember reading somewhere that the carbon footprint in the manufacture of a new motor vehicle is huge. The mining and production of the materials, the shipping to various parts of the world, the assembling, further shipping... the point was that unless you were driving a large amount in a very old car each year, it is better to actually keep it then invest in a new motor vehicle! If true, their statement is incorrect. But in the face of further revenue from government - sale of new motor vehicles and hefty environmental taxes - why should they care about truth vs fiction?
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Andrew on 20 Feb 10
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I'm all for the environment - I firmly believe in fighting global warming in every possible sense (in all aspects of my lifestyle I've made changes). Global warming is a huge problem and needs to be dealt with. Why in the UK then are taxes based on CO2 emissions lower
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Andrew on 20 Feb 10
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It would be beneficial for all your readers to determine if the government will apply the co2 tax only to NEW vehicle sales and for Engineering News to obtain assurances from the government that the tax will not apply to vehicles already registered.
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Malcolm Stoddart on 18 Feb 10
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It appears that the solution to every problem in South Africa is a TAX. Another fund to be squandered and potentially stolen from by the powers that be. How about a government subisidy for the replacement of older vehicles, since it is the older vehicles which generally have higher carbon emmisions,having less efficient engines. This would stimulate growth in the motor industry providing much needed jobs & capital to develop even more energy efficient engines. By the way, how much TAX are we going to imposeon Eskom ( Government) for building two coal fired power stations?
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KC on 18 Feb 10
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Let the oil companies pay the tax until such time as they are capable of producing "cleaner" fuel. Why only passenger vehicles? How much would ESCOM pay for poluting the air?
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Anonymous on 18 Feb 10
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For companies and employees who are earners of carbon credits, will they be able to offset trhis tax?
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Doug Southern on 18 Feb 10
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Indeed, it would not make much sense if this revenue is not used for promoting anything related to low carbon. Bad technologies preparing their demises by financing the development of cleaner alternatives is the best sustainable cycle. Regards PL
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Pierre_LOuis Lemercier Renewable Energy Centre Port Elizabeth on 18 Feb 10
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Come on. Please use your common sense. CO2 is one of the three main, but scarcest component required for photosynthesis. Our atmosphere only consists of 0.038% CO2. Due to low content of CO2 in the atmosphere this gas is pumped into greenhouses to enhance growth. So by using pure common sense, all available CO2 is utilised by vegetation as part of their normal growth. Global warming scaremongers fraudulently use emission figure based on the consumed coal and oil volume to calculate atmospheric CO2 increases. They never subtract the CO2 mitigation of this scares gas as a result of photosynthesis.
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Anonymous on 18 Feb 10