Question 642
Mr S J F Marais Democratic Alliance (DA) to ask the Minister of Trade and Industry:
(1) Whether any tax revenue was earned from the tariffs imposed on motor vehicles in the past two financial years; if not, why not; if so what amounts were earned each year;
(2) Whether any export subsidies were paid to manufacturers in the past two financial years; if not, why not; if so, (a) what total amounts were paid each year, (b) which manufacturers received such export subsidies and (c) what amount was paid as export subsidy to each of the manufacturers;
(3) Whether any of the export subsidies have been used to lower the retail price of vehicles locally; if not, why not; if so, what are the relevant details;
(4) How many employees are in the service of the automotive companies requesting a bailout?
Response:
(1) According to the South African Revenue Services (SARS), tax revenue earned from tariff (Customs and Ad Valorem duty) on motor vehicles was R9,7 billion during the 2007/08 financial year and R5 billion during the 2008/09 financial year. These amounts exclude a further R5,2 million and R18,7 million in duties paid to SARS for the importation of automotive components for the manufacture of vehicles during the 2007/08 and 2008/09 financial years respectively. All the above figures reflect amounts actually paid to SARS after rebates.
(2)All participants in the Motor Industry Development Program are able to earn Import Rebate Credits based on them meeting relevant performance criteria such as exports. 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 the amount 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. In addition, when these rebates are transferred to other users they are captured as additional rebates issued.
Please note that company specific information is strictly confidential and SARS does not issue firm specific data. This type of information constitutes trade secrets which cannot be put in the public domain.
(3) The pricing of vehicles is a matter left to the individual companies. However, tariffs have come down from close to 110 percent in 1994 to 28 percent in 2009 for fully built light motor vehicles. The retail price of vehicles has therefore dropped substantially in real terms. The recent automotive industry stakeholder agreement on the response to the economic crisis has included a commitment to provide independent and regular vehicle price benchmarking against other comparable markets.
(4) Available statistics indicate that most companies in the automotive industry are affected by the market slow down due to the international economic crisis. The total number of people already retrenched in the automotive manufacturing sector between October 2008 and June 2009 was approximately 24 000 out of an estimated 120 000 people employed.
Issued by: Department of Trade and Industry
9 September 2009
