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Green tax to hike Merc prices

Mar 03 2010 08:16 Joanita Cillié

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Johannesburg - The introduction of a green tax on vehicle-exhaust gases will have a significant effect on the prices of Mercedes-Benz vehicles.

Dr Hansgeorg Niefer, president and chief executive of Mercedes-Benz South Africa, said the tax would add an average R5 000 to the C-Class and an average R7 200 to the average cost of an E-Class.

A supplementary ad valorem excise duty on new passenger motor vehicles, with a tax on carbon-dioxide emissions at a fixed rate of R75 per gram/kilometre, was announced last month in the new budget. Niefer says this tax, together with the increase in the fuel levy, will be a heavy blow to consumers.

The fuel levy is being increased by 25.5c/litre.

The National Association of Automobile Manufacturerssays the green tax will generally mean a 2% increase in vehicle prices.

The tax will apply from September 1.

Niefer believes that it is unfair to punish the client.

He is also unable to understand why government does not exert more pressure on fuel companies to improve the quality of their fuel.

He reckons this will not happen if they are not forced to invest.

He says South Africa still has to be satisfied fuel at a Euro 2 level, while fuel in countries like China, Brazil and India complies with Euro 4 standards.

Euro 2 fuel has a sulphur content of 500 parts per million (ppm). Niefer says South Africa will only phase in fuel with a sulphur content of 50 ppm within six years.

Fuel with a sulphur content of 10 ppm, such as that used by the member states of the European Union, will probably be available here only by 2020.

Anton Moldan, environmental adviser to the South African Petroleum Industry Association, told Sake24 earlier this year that about R40bn needs to be invested in local refineries for cleaner fuel.

Moldan said that only 11% of the vehicles in the South African vehicle pool currently require cleaner fuel and for that reason the importation of a quantity of cleaner fuels for local consumption is being considered. This would be introduced at sufficient filling stations to meet current needs.

- Sake24.com

For more business news in Afrikaans, go to Sake24.com.

 
 
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