The South African Tyre Manufacturers Conference (SATMC) said it would now seek out constructive engagement with the National Treasury and Finance Minister Pravin Gordhan on a number of remaining fundamental governance issues, following the “clarity and certainty” on tyre levies provided during last month’s Budget.
The 2016 Budget, tabled in February, outlined the implementation of the waste tyre levy, effective October 1, to replace the existing industry funding model for tyre waste management.
This move was positive in mitigating against the industry having to pay a double levy to the South African Revenue Service (Sars) and the Recycling and Economic Development Initiative of South Africa (Redisa).
SATMC chairperson Riaz Haffejee explained that the incorporation of the levy into the “general pool of funds” collected from environmental taxes and levies had effectively standardised the tyre levy into the fiscus.
Industry had already been paying R2.30/kg of tyres manufactured to the Department of Environmental Affairs- (DEA-) appointed Redisa in line with mandatory legislative and regulatory requirements for waste tyre recycling.
“This amounts to a total industry spend of between R500-million and R600-million a year paid to Redisa for tyre waste management and recycling in the interests of the environment, consumer protection and road safety as it relates to the reuse of unroadworthy used tyres,” he said.
Now, the domestic tyre manufacturing industry body and trade association aimed to ensure the effectiveness of the tyre levy and that it was used for its intended purpose.
Haffejee believed there was a need to determine how the funds collected to date had been used to meet the targets and objectives of the Waste Tyre Management Plan.
There was also a need to review the representation by government and the tyre manufacturing industry within the Redisa governance structures overseeing and accounting for the use of these funds for industry waste initiatives.
“To date, industry has not been part of any institutional governance arrangements overseeing the use of these funds for industry waste initiatives. The result is that the SATMC is unable to assess whether funds paid by the industry has enabled the fulfilment of the Redisa-legislated mandate and our industry’s obligation to meet certain waste tyre management and recycling obligations,” he said.
Further, SATMC was requesting that it be determined whether the value of the tyre levies reflected the true cost of implementing the Tyre Waste Management Plan.
“This represents a key principle for efficient tax policy collection in South Africa, by ensuring that levies collected are cost reflective of the resource requirements. In this instance, for effectively implementing initiatives for management of the tyre waste stream,” he concluded.