Govt lowers tax on company cars

Cape Town - National Treasury has possibly rescued the company car from the list of endangered species.

Treasury has sliced tax on company cars by 4%, after public hearings on the Taxation Laws Amendment Bill, down to a monthly rate of 3.5% on the determined value of the vehicle. If the company car has a comprehensive service plan, the tax rate will be lowered by a further 0.25 of a percentage point

Frans Tomasek, head of taxation legislation at the South African Revenue Service, told parliament of the changes on Tuesday during a presentation of tax amedments to the finance committee.

But Treasury has not bowed to pressure from the motor industry to exclude the emissions tax for double-cab pick-up vehicles.

In the 2009 budget Finance Minister Pravin Gordhan imposed an ad valorem levy on passenger motors and light commercial vehicles, which included an emissions tax based on greenhouse gas emissions.

After consultation with the National Association of Automobile Manufacturers (Naamsa) a decision was taken to postpone the proposed emissions tax and convert it into a specific tax.

Naamsa also requested that the tax should apply only to passenger vehicles because no data existed on emissions from light commercial vehicles.

But Treasury pointed out that the proposed amendments had always been intended to apply to both double-cab and smaller pick-ups, because both transported passengers.

The Amendment Bill will therefore include light commercial vehicles as well as passenger vehicles.

The changes to the Bill are expected to be tabled by month-end.

- Sake24.com

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