South Africa to Introduce Carbon Tax on New Passenger Vehicles

Engineering News (South Africa) reports that South Africa plans to introduce a carbon tax on passenger cars and pick-up trucks beginning on 1 September 2010.  The main aim of the tax is to influence the composition of South Africa’s vehicle fleet so that it becomes more energy efficient and environmentally friendly.

by flickr user Michale Thorne

The article quotes Finance Minister Pravin Gordhan who:

“announced in his maiden Budget speech in February that only new passenger vehicles would be taxed, based on their certified CO2 emissions at R75 per g/km for each gram per kilometre above 120 g/km.”

The article notes that “[v]ery few vehicles available in the South African market meet the 120-g threshold.”

Critics of the carbon tax include the automotive industry, as well as international organizations.

The article notes that:

“the Organisation for Economic Cooper-ation and Development (OECD), in its inaugural OECD Economic Survey of South Africa, released in Pretoria late last month, argues that the country’s CO2 tax is “a positive step”, but notes that fuel taxes to curb CO2 would have been preferable.”

In a separate article, the National Association of Automobile Manufacturers of South Africa asserts that:

“The Treasury’s announcement failed the test of predictability and certainty for manufacturers and buyers since, at this stage, there was no clarity or information available to industry regarding the basis of determination of CO2 values for purposes of calculating the CO2 tax on light commercial vehicles.