Tax to hit double cabs

Cape Town  The Treasury has explained to parliament's standing committee on finance that it is sticking to its intention to hit gas-guzzling private cars with a "carbon tax", despite protests from the motor industry over the inclusion of double cabs and small bakkies as passenger vehicles in the proposed vehicle CO2 emissions tax net.

The industry argues that these vehicles are classified as light commercial vehicles which should be excluded from the CO2 vehicle emissions tax. In addition, the industry says that emissions data for light commercial vehicles are not available.

However the Treasury said on Tuesday that it has always intended to include double cab vehicles in the first phase of the implementation of the CO2 vehicle emissions tax. This is in line with the intent of the VAT Act and the fact that double cabs are mainly used as passenger vehicles.

"Including double cabs in the CO2 vehicle emissions tax net is also in line with the original intent of this proposed tax: the taxation high engine capacity vehicles to discourage the use of vehicles are not fuel efficient and encourage the shift to the more fuel efficient ones," the Treasury said.

It added that since single cab and double cab vehicles have similar engine sizes, these two categories of vehicles should be treated the same for the purpose of the vehicle CO2 emissions tax.

The CO2 vehicle emissions tax will be collected and paid over to the South African Revenue Services by the vehicle manufactures and /or importers. A part (or all) of the CO2 vehicle emissions tax is thus likely to be built into the price the manufacturer or importer charges their clients.

"It will be good practice," the Treasury suggests, "if dealers could reflect on the invoices to their clients the CO2 emissions of each vehicle and the estimated total CO2 emissions tax."
 
- I-Net Bridge