Johannesburg - The long-standing fractious relationship between domestic tyre manufacturers and their opposition to the controversial Recycling and Economic Development Initiative of SA’s (Redisa) waste tyre plan appears to have partly contributed to the industry’s support for the government’s planned environmental tyre levy.
Once the environmental tyre levy is implemented through the Customs and Excise Act, the prescribed levy of R2.30 a kilogram excluding VAT will be paid to the South African Revenue Service (Sars) instead of directly to Redisa.
Direct payment
Riaz Haffejee, the chairperson of the South African Tyre Manufacturers Conference (SATMC), the official industry body and trade association for the domestic tyre manufacturing industry, said yesterday the industry had consistently advocated for the direct payment of the levy to Sars in support of the government’s efforts to achieve improved transparency, accountability, monitoring and evaluation in the use of the funds raised by the levy to give effect to the industry’s legally obligated extended producer responsibility.
“This is imperative given the value of funding involved. Since the inception of tyre levy payments, the total industry levy contribution is estimated at more than R2 billion or between R500 and R600 million a year,” he said.
There were a number of ultimately unsuccessful court challenges prior to the implementation of the levy in 2013 to prevent Redisa, the only waste tyre plan approved so far by the Department of Environmental Affairs, to stop the implementation of the levy and prevent Redisa from being the only approved waste tyre plan.
In 2014, then Continental Tyre South Africa managing director Dieter Horni, who at the time was also chairman of the SATMC, said the company was paying about R10 million a month to Redisa for the collection and recycling of waste tyres, but Redisa was unable to collect its tyres and it had to find a way to get rid of them in an environmentally friendly way.
A Redisa spokeswoman responded that a phased implementation did not mean every tyre dealer had a portion of its tyres collected but that more dealers would have all their tyres collected as the service was rolled out.
National Treasury last week announced the postponement of the implementation of the levy to February 1 next year. It said Finance Minister Pravin Gordhan had decided on the postponement to allow Sars to consult further with all affected parties on the practical arrangements for the implementation of the levy.
Waste reduction
The National Treasury said the objectives of this initiative were to encourage waste reduction, reuse, treatment and recycling and reduce disposal into landfills while helping in government’s efforts to promote greater levels of transparency and accountability.
It said revenues from the levy would be deposited into the National Revenue Fund and an on-budget allocation would be made available through the budget of the Department of Environmental Affairs.
“This will ensure a more robust and transparent revenue collection and funding mechanism. The principle of extended producer responsibility will be encouraged and all producers and importers of tyres will be required to fully participate in the implementation process,” it said.
Haffejee said the SATMC welcomed and valued the opportunity that the new implementation date provided for further consultation between industry and government on technical, operational and transitional matters.
“This will assist in ensuring the effective and efficient implementation of the environmental tyre levy,” he said.
Attempts to obtain comment from Redisa were unsuccessful.
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