Tax Revenue

In 2023, the OEM Customs Account reflects that the seven OEMs paid R16,937 billion in taxes and duties to the Fiscus. These consisted of the ad valorem tax, CO2 tax tyre levies and a portion of the import duty on vehicles and original equipment components. This amount excluded VAT and taxes paid by the independent vehicle importers.

There is a set tariff regime on vehicles and automotive components imported into South Africa. Import duties on vehicles and automotive components are set at 25% on light vehicles and 20% on original equipment components. A preferential agreement results in imported vehicles from the EU paying only 18% duty.

The import duty on medium and heavy commercial vehicles is set at 20% ad valorem. A preferential agreement results in imported vehicles from the EU paying only 12% duty. Assembly operations of trucks and buses receive the benefit of the duty-free importation of all driveline components, which include the engines, transmissions, drive-axles and gearboxes. However, tyres, which are manufactured domestically, attract a 15% import duty.

Even though these duties could be rebated to zero, some OEMs still pay import duties under the existing Automotive Production Development Programme Phase (APDP2). This could mean that another 5% to 10% could be given through to the consumer in the price of the vehicle.

The VAT is set at a standard rate of 15% in South Africa.