One of the many perks of writing is the freedom to grace an article with the headline it deserves. Many media outlets have covered this story, but nobody has called it what it is. Every single one of us who buys a new car in South Africa today is being screwed. It’s called a Green Tax, and it is a monumental rip off.
South Africa is not the first to introduce an emissions tax on cars; in fact we’re a bit behind. But we are certainly the first to have got it completely and utterly wrong. In fact the green tax might be one of the most ill-considered, cynical acts of profiteering by a government that I’ve ever come across. To put it simply, we’re being screwed.
In case you missed it last year, the National Treasury of this country introduced a “Green Tax” on new motor vehicles. The tax is weighted on a given car’s CO2 emissions, and the amount is levied on you, the consumer. The tax kicked in on Spring Day, September 1, 2010.
If you bought a brand spanking new car between then and now, you might not even have noticed the extra charge – but let’s get the maths out of the way quickly. Essentially, for every litre of fuel a car burns to travel one kilometre, a certain amount of CO2 is spat out of the exhaust, into our virginal atmosphere. The rate of emission is slightly less for diesel than for petrol. For every gram over 120g/km that your new dream-wheels exhale, you will be charged R75. Whatever that figure comes to is also subject to VAT. It doesn’t seem like a diabolical amount, but the real travesty here is the miniscule number of cars actually fall under that threshold.
Because I am a certifiable car nerd, I’ve always felt that this number would be fairly low. The thing is, there’s no database of this sort of information available in South Africa, so I had to go through the UK’s car market database and check that information against cars currently available in SA. Side note: I do have an active social life.
Anyway, the UK has 660 cars available under the taxable threshold of 120g/km CO2, and South Africa has twenty four. Twenty four. This list (posted at the end of the article) is about the sum total of your choice if you want to avoid the green tax, give or take one or two models. And they’re not exactly the most desirable of cars: almost all of them have engines under 1.3 litres.
To give that some perspective, there are 1970 different vehicles available to you, the South African motorist, from 47 manufacturers, comprised of 346 ranges. This means that a n extraordinary 1.2% of the cars available to you for purchase today are safe from the tax. Ergo, 98.8% of us will be take a hit.
The reason UK buyers have so much more choice is simple: fuel. Our fuel is getting better, but it is only just beginning to level up to what’s known as Euro3, a standard of cleanliness already old news in Europe – they’ve moved on to Euro5. Most manufacturers have already developed cars with very low CO2 emissions, but they can’t bring them here because we simply don’t have the requisite fuels available.
You are being optionally taxed on something over which you have almost no control. The government intended for this to be an incentive tax, but it is essentially a penalty tax. They want you to buy a smaller, more fuel efficient car, and if you don’t, well then they’ll spend your money on making South Africa greener. But will they?
The answer is… Maybe. The government is not bothering to ring-fence the revenue, so income generated from the Green Tax is going into the general money pot. Government has said it will spend the money on green projects “where possible”. I’m sorry, but that’s just not good enough. If I have to spend an extra R20 000 on a car, I want to see a giant windmill farm, or a solar electric array, or a wave-power generation system, or a tree-planting project – anything. Anything that will make me feel my money didn’t end up in the mahogany interior trim of an anonymous minister’s BMW.
In slight defense of the government, they did hire a professor from the University of Stellenbosch to contact the car manufacturers and ask how the money could be spent. I was told by the head of public relations at a major German manufacturer that he had been contacted, and he’d been asked how the money could be spent to develop greener cars. The PR chap was astounded. As anyone vaguely interested in cars will know, these vehicles are researched and developed in Germany, Japan and the USA, and that’s about it – certainly not in South Africa. The cars exist, the PR man told the Prof, we just need the fuels.
This level of woeful misunderstanding of an industry is on par with Julius Malema trying to shut down Twitter. Except in this case the consumer is the fall guy, bearing the brunt of public policy which is completely out of step with reality.
The idiocy continues unabated. We’re also the first country in the world to tax light commercial vehicles (bakkies). The wonderful thing about this is that these vehicles are never tested for CO2 emissions, so there is no data to base the tax on. Genius. To get around this issue, the government will tax your new bakkie based on engine size, which is ridiculous. That’s like saying a salad and a pasta dish have the same number of calories because they’re served in the same size bowl.
The tax is inherently unfair in that it punishes all motorists equally. If two motorists buy the same car, but one drives 10 000km per year, and the other covers 30 000km per year, the second motorist belches out exponentially more CO2, but both owners are taxed equally.
I really could go on here, but I’m just making myself angry. You might be asking yourself how a tax like this made it into law. Why didn’t someone say something? Well they did. Every concerned party sat down with the government and explained why the whole idea was premature and essentially futile, at least for the time being. But as NAAMSA, the National Automobile Association of Manufacturers in SA, has stated, they were arbitrarily ignored.
I researched and wrote this article because I want everyone who might even be thinking of buying a new car to know how and why you’re being shafted. I don’t know what we can do about it. I don’t know what your car dealer can do about it, or the company that makes the cars, or the professors, or the fuel companies, or anyone really.
Perhaps you don’t have a problem with this. Perhaps adding R14 000 to a new R1 million Mercedes Benz is not really a problem for you. And fair enough, nobody is saying you ought not buy yourself a new car. You’ve worked hard, enjoy it. But nobody likes being swindled. We’re being swindled by law. And I have a major problem with that.
You can visit NAAMSA to calculate the tax on your new car.
List of new cars available under 120g/km CO2
(If I’ve missed one, please do add it in the comments section)
Volvo S40 1.6D
Volvo V50 1.6D
Volvo C30 D2
Smart Fortwo Passion
Honda Insight Hybrid
Honda Jazz Hybrid
Honda CR-Z Hybrid
Volkswagen Polo 1.2 TDI
Volkswagen Golf 1.6 TDI BlueMotion
Citroen C1 1.0
Suzuki Alto 1.0
Citroen C3 1.6D
Toyota Aygo 1.0
Peugeot 107 1.0
Peugeot 207 1.6 HDi
Ford Fiesta 1.6 TDCi
Hyundai i10 1.2
Audi A3 1.6 TDi
Audi A1 1.2
Fiat 500 1.2
Fiat Panda 1.2
Kia Picanto 1.0
Nissan Micra 1.2
Chevrolet Spark 1.0
Renault Twingo 1.2
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