PRETORIA – Toyota South Africa Motors (Tsam) maintains that taxes account for about 42 percent of the purchase price of vehicles with an average price of between R200 000 and R900 000 and was seeking government intervention to improve the availability of mobility in the country.
Andrew Kirby, the president and chief executive of Tsam, said yesterday that the tax payable on vehicles in this price range was “dramatic” and include import duties, ad valorem tax, VAT, the CO2 tax on vehicle emissions and the tyre levy. Kirby said the majority of vehicles sold in South Africa were within this price range.
He said there had been some engagements with the Trade and Industry Department on this issue and they were in the process of discussing some alternatives.
“It’s obviously a difficult discussion, because it means there could be some reduction in the import duties received by the Treasury. But our view is that if we find a smart solution, we might be able to stimulate the volumes and the Treasury would not lose out. It has to be a win-win. We understand that,” he said.
Kirby said the automotive industry had not yet tabled any proposal to the Treasury on this issue, but anticipated doing so before the end of the second quarter of this year.
He added that tax accounted for a much higher proportion of the purchase price of vehicles in South Africa than in larger markets such as Europe, the US and China.
Speaking at a Toyota State of the Motor Industry event, Kirby also referred to a postgraduate thesis done by a student last year on the impact on the South African economy if the government switched from buying a mixture of locally manufactured and imported vehicles to purchasing only locally manufactured vehicles.
“The impact is dramatic and it would have a R37 billion economic multiplier impact on the local economy. I think we need to be doing things like that,” he said.
Kirby added that investments were being made in local manufacturing by cities, the provinces and nationally, but these investments were not aligned in all other areas of the government.
“That is something we really need to address. Especially when there is already a programme to support manufacturing, it would make sense for local purchasers to leverage that,” he said.
Kirby confirmed that there had also been some discussions with the Trade and Industry Department on this issue, but it had not been formally tabled with the government.
He added that Tsam was expanding its footprint in Africa and considering exporting knocked-down kits for assembly in some countries on the continent.
Kirby said Tsam had identified a number of core countries in Africa that made sense for this project, including the East Africa bloc with Kenya as its centre, and the West African bloc that included the Nigeria-Ghana region.
He said a final decision had not yet been made on the countries to which it would export the kits, which would predominantly be Hilux models.