Motorcycles, buses and trucks exempt from Namibia’s environmental tax

Windhoek – The carbon emission tax is only applicable to passenger vehicles, sport utility vehicles (SUVs) and double cab pick-ups, while motorcycles, trucks and buses are excluded.

The environmental tax came into effect on 11 July 2016, according to a public notice issued by the Ministry of Finance on the imposition of duties on certain disposable goods and vehicle emissions under the Customs and Excise Act of 1998.

Local financial services firm, Simonis Storm Securities in an analysis titled ‘Carbon Emission Tax to affect volumes going forward’, which was issued on Friday, said the tax only applies to vehicle with mass not exceeding five tonnes.

“This tax is only applicable to certain vehicles most notably passenger vehicles, SUVs and double-cab vehicles with gross vehicle mass not exceeding five tonnes. Motorcycles, trucks and buses will not be subject to the duties. The tax is R40 per gramme carbon dioxide per kilometre emission exceeding 140 grammes,” it said.

The Government announced that all importers of motor vehicles will be required to submit to the Customs and Excise department in the Ministry of Finance a certificate indicating the carbon dioxide (CO2) emission of each type of vehicle to be cleared. It is anticipated that importers of second-hand vehicles may experience challenges in obtaining the certificate.

In such instances, the CO2 to be declared will be equal to or the same as the CO2 of the new model of the same kind of motor vehicle, according to the government notice.

However, Simonis Storm Securities predicted that the new tax collection will not be as high as expected.

“Vehicle sales have remained robust in the recent past, but going forward we expect that this new tax coupled with lower spending by consumers will result in the tax collection not being as high as it may have been initially expected. This is because volumes will be lower and this tax will be passed on to consumers,” it warned.

Vehicle sales for June 2016 increased slightly by 3.5 percent month-on-month to 1 589. This is the highest in seven months since 1 721 units were recorded in November 2015, according to the analysts.

The firm predicted that light commercial vehicles, which account for 54.8 percent of total new vehicle sales, will continue to be the main drivers in the number of new vehicle sales. The suggested aggregate value of new vehicle sales stood at R6.3 billion during June 2016 compared to R5.7 billion recorded in the month prior to that. This is the highest value recorded since R6.3 billion was recorded in September 2015. – Nampa

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