- Containers now take 3 to 4 months to be filled in Japan for shipment
Mbabane –Dealers in EmaSwati import cars, commonly known as Dubai’s, have been dealt a huge blow in their businesses following a number of factors.
Government’s decision to decrease the number of import cars into Eswatini has been one of the major issues that has seriously affected the business of emaSwati Dubai’s dealers.
This after government passed a legislation which states that import car dealerships will collectively bring in 8 000 vehicles per year while individuals could only bring into the country 2 000 automobiles. This is courtesy of the new set of terms and conditions for import car dealerships announced by the Minister of Finance, Neal Rijkenberg. Rijkenberg, through Eswatini Government Gazette Extraordinary No.174, introduced Legal Notice No. 315 of 2020, which is in line with the Import Control Order of 1976 (Order No.12 of 1976).
Leading to the introduction of this piece of legislation, import car dealerships were said to be importing in excess of 22 000 vehicles per year. However, since the advent of the new order, this amount has been shed by over 150 per cent as only 10 000 grey cars could be imported per year.
In light of this, a number of import dealerships proprietors have closed their businesses as they claimed that they were operating at a loss. The loss, it was claimed, came from the limitation of the number of vehicles to be imported and the increment in the free-on-board (FoB) levy. This levy was increased in excess of 300 per cent by government, along with the limitation of imported vehicles permitted into the kingdom. The Ministry of Finance introduced Legal Notice No. 314 of 2020, which could be cited as Imported Motor Vehicles Levy (Imposition) Notice of 2020, which should be read with the Fourth Schedule of the Customs and Excise Act of 1971.
LiSwati import car dealer, Thulani Nkambule lamented the situation and said, “Businesswise my brother, we have incurred serious losses. Firstly, this is due to the increase of the import levy which is 20 per cent plus ERS 15 per cent. Since COVID-19 outbreak in the region of Japan, people also started to be sceptical in purchasing the vehicles because of shortages of sanitisers and drugs.”
The dealer added, “Apart from these challenges I had just mentioned, the cars now take too long to arrive in Africa after they had been purchased as opposed to prior to the outbreak of COVID-19 as now containers will take three to four months before they fill up.”
The legislation, on the other hand, states that the import levy shall be imposed on every imported used motor vehicle. It states that about eight years from the date of manufacture, it shall be 20 per cent ad-valorem import levy FoB value.
Meanwhile, seasoned legislator in Lobamba Lomdzala MP Marwick Khumalo, who is also the Chairperson of the House of Assembly Portfolio Committee on Finance does not believe that the 2022 national budget is pro-poor.
Minister of Finance, Neal Rijkenberg delivered his 2022 national budget speech in Parliament on February 18, 2022 and many observers and analysts believed it to be a pro-poor budget
Khumalo, at the Sibane Hotel during the 2022 Post Budget Seminar said, “I do not agree with the Minister Rijkenberg especially when it comes to the issue of ‘Dubai’s’ as their removal from the market will mean less contribution in fuel levy to the economy.”
He further indicated that the ordinary citizens had been deprived the privilege of purchasing affordable cars yet it provided them with a convenient mode of transport. Meanwhile, in response to some of the concerns, Rijkenberg said the decision of removing ‘Dubai motor vehicles from the market was taken after thorough assessment and it is for the good of the nation.
In 2020, parliament and government reached a consensus over the capping of the age limit for imported vehicles at 11 years for the first two years. This will be followed by the reduction of one year staggered over the next four years after 2022.
Employees of the Dubai dealerships and parliamentarians argued that it was not in the interest of the public as a majority of Emaswati who depended on these vehicles will not afford the new prices. Subsequent to the tabling of the petition, MPs elected a seven member select committee chaired by Lobamba Lomdzala MP Marwick Khumalo to address the matter as well as ensuring the implementation of the resolution by the minister.
MP Khumalo noted that many hours of meetings were held over a period of two days given that the committee was only given five days to complete the task. Minister of Finance Neal Rijkenberg maintained that the reason for reducing the age limit of the vehicles was to improve the country’s SACU revenue which has been gradually declining over the years.
He also noted that a number of the SACU member states had already introduced a threshold of eight years.
He was seconded by Ndzingeni MP Lutfo Dlamini who said concerning the under declaration, government through ERS should introduce efficient ways of ensuring that the accurate value of goods was declared at ports of entry as the under declaration was also impacting on the SACU revenue.
He also noted that there was a pressing need for an efficient regulation of the industry as it was evident that most of the challenges engulfing it were due to the lack of proper regulation.
“As parliament we are concerned about the interest of the public so dealers found breaking the law should be dealt with accordingly. If it calls for the deportation of defaulting dealers, so be it,” he said.
