Prepare for price hikes across South Africa’s new passenger-vehicle and double-cab bakkie market from April 2020, when government’s revised CO2 emissions tax rates kick in.
Finance minister Tito Mboweni announced the changes to South Africa’s vehicle emissions tax rates during his Budget Speech back in February. And now we’ve decided to take a look at how the updates will impact the prices of a handful of popular new vehicles.
The reason for the changes? Well, the National Treasury says they're “in line with global vehicle emission standards and the shift to low-carbon, fuel-efficient vehicles”.
For the record, the emissions tax rate for passenger cars will change from the current R110 (plus VAT) per gram of carbon dioxide per kilometre (g/km) above the 120 g/km threshold to R120 (plus VAT) per gram above a new, lower 95 g/km threshold “to align with the Euro 6 emission standards”.
Clear as mud, right? Well, if you’re a little lost, don’t panic. Let’s take a look at a practical example to see the impact of this tax adjustment.
We’ll use a mid-spec variant of South Africa’s best-selling passenger car – the Volkswagen Polo Vivo – to illustrate our point. Currently, the Polo Vivo 1,6 Highline model costs R237 100, including emissions tax of R3 416. After 1 April 2020, that CO2 tax figure will balloon to R7 176. That’s an extra R3 760 coming out of your pocket.
VW’s Polo 1,0 TSI Comfortline, meanwhile, ducks under the current 120 g/km threshold thanks to its turbocharged three-cylinder petrol engine’s average CO2 emissions of 103 g/km. But from 1 April, this model will have R1 104 added to its price thanks to the new, lower threshold.
And double-cab bakkies? Well, the increases here aren’t quite as dramatic, with the emissions tax rate for dual-cab pickups set to be adjusted from the current R150 (plus VAT) per gram of carbon dioxide per kilometre above the 175 g/km threshold to R160 (plus VAT), crucially with the threshold unchanged.
Here, we’ll use the Toyota Hilux (South Africa’s best-selling bakkie) as an example. At the moment, some R4 140 of the Hilux 2,8 GD-6 Legend 50’s R593 800 purchase price covers emissions tax. After the adjustment, this number will increase to R4 416, or some R276 more. Ford’s R573 100 Ranger 3,2 TDCi Hi-Rider XLT, meanwhile, will have its emissions tax figure grow from R3 623 to R3 864 (an increase of R241).
Original article from Car