Mbabane: The select committee that was tasked to interrogate the controversial matter of import cars has reached a consensus with the Minister of Finance Neal Rijkenberg to cap the period for import cars to 11 years from the date of purchase, removing the seven (7) years that was initially tabled by the Minister.
This comes as an outcome for the work of the Lobamba Lomdzala Member of Parliament Marwick Khumalo led committee. The committee was actually elected at the House of Assembly on October 21, 2020 while employees of the import cars dealers were petitioning the Parliament on the matter.
The committee was given five (5) days to interrogate on the matter and table a Report before the August House.
On Monday, the committee chairman MP Marwick Khumalo tabled the report in the August House in front of the Deputy Speaker Phila Buthelezi.
According to the report, the meeting held by the committee with the Minister Rijkenberg, he made numerous submissions before the committee and that includes SACU receipts and revenues.
The minister told the committee that SACU Agreement establishes the SACU Common Revenue Pool is made up of Customs, Excise and Development Components. The Customs Component is made up of customs duties collected on goods imported in to the Common Customs Area.
The Minster said SACU revenues have dropped significantly, from 21 percent to 7 percent due to the importation of goods from non-SACU Member States, which the import cars constitute.
Due to the COVID-19 Pandemic, SACU receipts are expected to shrink further, hence the government is introducing these remedial measures. He added that import car dealers declare a value that is less than the actual value at the points of entry and this is negatively affecting the country’s SACU Receipts.
However, the committee argued that government should have formulated a strategy for the smooth transition, to avoid the outcry from the members of the public.
The committee further submitted that purchase of import cars has an insignificant impact on the decline of SACU receipts compared to the other key players; one of which is the business activity taking place with non-SACU members.
Therefore, there is a pressing need for an efficient regulation of the industry as it evident that most of the challenges engulfing the industry are due to lack of proper regulation. The lack of regulation in the industry has placed the country in the unfavourable situation that is in today.
Moreover, the committee said it is inaccurate to claim that import cars are responsible for carbon emission, as a number of local cars are much older than the import cars. To achieve this, government should set a life span for all motor vehicles.
According to the report, during the meeting the minister failed to give a comprehensive view of the matter and is not considerate of the positive contribution on the livelihood of the business activities on the ground such as the number of people employed by the car dealers.
At the end the minister and the committee agreed to regulate the age limit on import cars in a staged manner which begins with the 11 years cap on the import cars which will be effective from December 1, 2020 to November 2022.
Another reduction of the age limit for the import cars will commence on December 1, 2022 and at that time motor vehicles that will require permits shall not be older than ten (10) years at the date of its purchase. This cap will last until November 30, 2023.
From December 1, 2023 to November 30, 2024, motor vehicles that require permits shall not be older than nine (9) years at the date of its purchase.
From December 1, 2024, motor vehicles that require permits shall not be older that eight (8) years at the date of its purchase. The eight years will be in force until such time where the Honourable Minster for Finance deem it necessary to review, after consultation with stakeholders.
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