Question 874
Mr SJF Marais Democratic Alliance (DA) to ask the Minister of Trade and Industry:
(1) (a) How much tax revenue has been generated by the tariff on motor vehicles and (b) what is the value of import rebate credit certificates awarded to companies in the (a) 2007/08 and (b) 2008/09 financial years in terms of the Motor Industry Development Programme (MIDP) and the Automotive Production and Development Programme (APDP);
(2) Whether the Industrial Development Corporation has performed a cost-benefit analysis on the MIDP; if not, why not, if so, what are the details of the report;
(3) Whether the report will be released to the public; if not, why not; if so, when?
Response:
(1) Duties on vehicles and components were 30 percent and 25 percent respectively in 2007 and came down to 29 percent and 24 percent in 2008. During this period about R74 billion worth of vehicles and components were imported each year.
According to the South African Revenue Services (SARS) net tax revenue earned from tariffs (Customs and Ad Valorem duties) on motor vehicles was R9,6 billion during the 2007/08 financial year and almost R5 billion during the 2008/09 financial year. These figures reflect amounts actually paid to SARS after import rebates in terms of the Motor Industry Development Programme.
Vehicles: 2007/08
Customs Duty: amount due, R9.8 billion
Ad Valorem Duty: amount due, R2.8 billion
Customs Duty: amount rebated, R2.6 billion
Ad Valorem Duty: amount rebated, R0.4 billion
Customs Duty: amount actually paid, R7.2 billion
Ad Valorem Duty: amount actually paid, R2.4 billion
Vehicles: 2008/09
Customs Duty: amount due: R6.8 billion
Ad Valorem Duty: amount due, R2.4 billion
Customs Duty: amount rebated, R3.7 billion
Ad Valorem Duty: amount rebated, R0.6 billion
Customs Duty: amount actually paid, R3.1 billion
Ad Valorem Duty: amount actually paid, R1.8 billion
During the 2007/08 financial year import rebate credit certificates worth approximately R7 billion were issued whilst during the 2008/09 financial year issued import rebate credit certificates amounted to approximately R10 billion. There is a difference in amounts of rebates earned and used during the same period due to the fact that the validity period of the rebates is twelve months from date of issue and also that when these rebates are transferred to other users they are captured as additional rebates issued and thus result in some double counting. In terms of tax legislation company specific tax information is strictly confidential and SARS does not issue firm specific data.
(2) As part of the recent review of the MIDP, the Industrial Development Corporation conducted a cost benefit analysis of the proposals that led to the adoption of the Automotive Production and Development Programme (APDP) that will replace the MIDP. The results of this exercise clearly indicate that the gains in respect of commercial activity and hence employment in the broad domestic economy outweigh the costs of the APDP.
(3) The MIDP review report will not be made public as it contains sensitive company specific data and information. However, in due course a public document with aggregated information regarding the automotive industry as collected during the review process will be issued. Such documents will highlight the performance of the industry in the past few years as well as identify some key challenges facing the local industry in the face of growing international competition for investments in automotive manufacturing.
Issued by: Department of Trade and Industry
8 September 2009
