The South African government is considering carbon emissions tax for used vehicles as well as new cars, according to the country's Finance Minister Pravin Gordhan.
In what the Business Day newspaper in Johannesburg on Wednesday described as a slight shift of policy, Gordhan said that carbon taxes for light commercial vehicles would be delayed until further consultation with vehicle manufacturers had been held.
The newspaper commented that imposing emissions tax on used vehicles as well as new, would dramatically increase South Africa’s tax base.
In the South African parliament on Tuesday, Gordhan said the tax for used vehicles would encourage South African citizens to use public transport.
Earlier this month vehicle makers in South Africa said that the carbon tax should coincide with the availability of better quality fuel , which has yet to be introduced in South Africa .
“Instead of increasing the tax burden on the light commercial vehicle segment, the government should rather focus on incentives to rejuvenate the vehicle industry in SA … which would benefit industry, consumers and the environment,” said Nico Vermeulen, executive director of the National Association of Automobile Manufacturers of South Africa.
The association previously said the unavailability of Euro 4- and Euro 5-standard fuels, limits manufacturer’s ability to cut emissions.
South African economist Tony Twine said a carbon tax for used cars was “a good thing”, but added that nothing had been said how it would be imposed, with what quality fuel, and when.
Gordhan said on Tuesday that the South African government has 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.
“All in all, there is a place for all these mechanisms if we want to reduce the emission of greenhouse gases and ensure we leave our children with a better legacy when it comes to air quality and reducing the risks of climate change.”
Although new car sales in South Africa have increased gradually this year, the South African car industry is still recovering from the global economic meltdown.