Tax on emissions ramps up interest in fuel-efficient vehicles

Finance minister Trevor Manuel’s 2009 budget has a strong green streak – which has a direct impact on the local freight industry. His announcement of a six cents a litre increase in the general fuel levy is a permanent hike in the fuel price that will once again make the freight industry and motorists look for fuel-efficient vehicles. The levy equates to a 5% increase in the tax on petrol and 5.7% on diesel. However, as an incentive to fleet owners to convert, the biodiesel fuel tax concession has been raised from 40% to 50% and bioethanol will remain outside the fuel tax net, but subject to VAT at the standard rate. Fuel prices were further increased by a 5 cents a litre rise in the Road Accident Fund levy on petrol and diesel. More pressure on freight operators and the auto industry to go green include greenhousereducing “options” such as “the use of emission charges and tradable permits, tax incentives for cleaner production technologies and reform of the existing vehicle taxes to encourage fuel efficiency,” he said. In its response, the National Association of Automobile Manufacturers of South Africa (Naamsa) said: “The industry noted the Minister’s stated intent to adjust excise duties on motor vehicles to take account of carbon emissions. The adjustments would take effect from March, 2010 and the proposals would need to be evaluated to determine the impact on specific models as well as corresponding pricing implications. “Naamsa would engage National Treasury on the matter”.