MIDP review expected to address benefits for component manufacturers

‘Don’t expect major changes’
ED RICHARDSON THE AUTOMOTIVE industry and other relevant stakeholders should not expect major changes when the Department of Trade and Industry releases its Motor Industry Development Programme (MIDP) review, according to Duane Newman of Deloitte. Speaking at a presentation on the latest MIDP developments hosted by the company in conjunction with the Port Elizabeth Exporters’ Club, he said the output from the MIDP review would likely be based mainly on information on its past role and achievements in the automotive industry. He does not believe the review will provide any further certainty of its role beyond 2012. However, Newman says the main concerns that were presented to the MIDP review will, amongst others, address the lack of benefits for component manufacturers, a call for simplification of the programme, and MIDP’s contravention of some of the World Trade Organisation’s policies. Apart from potentially furthering local job creation and investment, Newman believes the MIDP will move away from export-based product incentives. Component manufacturers should also receive more benefits. There is also the possibility that import duty cuts will no longer be immediate as the MIDP system is based on a high import duty rate. Newman also expects export credits to be used against Income Tax and VAT. The revised MIDP is due to be submitted to the DTI this month, with the details being made public in late 2006.