Govt mulls green tax on all cars

Johannesburg - Though it will not be implemented this year, the government is considering slapping a carbon dioxide (CO2) vehicle emissions tax on all cars - new and old, Finance Minister Pravin Gordhan said on Tuesday.

This will be implemented by reviewing the approach to vehicle licence fees, which are implemented by provinces, he told parliament.

"As we improve our public transport, we could also impose higher fuel levies and demand better quality fuel. All in all, there is a place for all these mechanisms if we want to reduce the emission of greenhouse gases and ensure that we leave our children with a better legacy when it comes to air quality and reducing the risks of climate change," Gordhan said.

This tax will be imposed in terms of amended schedules and rules to the Customs and Excise Act.  

"As with other tax proposals, we have consulted with relevant stakeholders, including the motor car industry. After some initial misunderstanding, I met with the largest motor car industry CEOs last week, and confirmed that the CO2 vehicle emissions tax on passenger cars will proceed as scheduled on September 1 2010.

"However, I have also taken into account some concerns of the industry, and agreed that the tax on double cabs will be delayed slightly, and come into effect on another date in the next few months. This tax will be extended to all other light commercial vehicles at a later date," Gordhan said.

"I should add that we do have a comprehensive approach to the environmental taxes. Work in this area began in 2003, including a paper on environmental fiscal reform published in 2006 and the discussion paper on carbon taxes that will be published shortly," he added.