manufacturers can take advantage of current laws to build electric cars in south africa

Automakers who take advantage of South Africa’s current legal frameworks stand to benefit greatly from the global shift to electric vehicles (EVs) by building these cars on local soil, according to law firm Cliffe Dekker Hofmeyr (CDH).

Mainly, this can be done by making use of the country’s special economic zones and taxes on petrol and diesel vehicles.

Special economic zones

Years ago the South African government via the department of trade and industry established various special economic zones (SEZs) within designated areas in South Africa with specific tax incentives on income tax, employee tax, VAT, and customs and excise duties.

Under sections 12R and 12S of the Income Tax Act (ITA) 58 of 1962, these incentives allow qualifying companies carrying out operations in SEZs a 15% income tax rate, compared to the standard 27%, as well as the opportunity to claim a special capital allowance of 10% per annum on the costs of new or unused buildings, or improvements to such buildings.

However, only SEZs approved by the minister of finance are applicable to section 12R of the ITA, and currently, only a small portion of SEZs benefit from the tax incentives, said CDH.

“Motor vehicle manufacturers (and their suppliers) should consider the section 12R SEZ tax regime and its applicability to the production of electric vehicles in South Africa, given that such production of electric vehicles is either non-existent or negligible currently,” said the law firm.

“The commercial impact of these incentives is very favourable, and it could be used as a key tool to adapt to the growing global shift towards net-zero motor vehicles.”

Manufacturers must also take into account the scaling down, and eventual banning of the sale of internal combustion engine (ICE) vehicles in the UK and EU – South Africa’s two largest automotive export destinations.

These markets have moved to completely ban the sale of ICE vehicles by 2035 and these measures “will have a profound influence on Africa and South Africa as exports to those markets will be significantly impacted unless the local market starts to embrace the move towards “net-zero” and commences producing electric vehicles,” said CDH.

The Tshwane Automotive Special Economic Zone (TASEZ), while not currently a section 12R SEZ, could be approved for this purpose in the future, according to the law firm.

Therefore, the TASEZ “could certainly be considered a launching pad for manufacturers to commence producing electric vehicles within the precinct,” said CDH.

manufacturers can take advantage of current laws to build electric cars in south africa

Carbon tax

In 2019, a carbon tax on greenhouse gas emissions arising from the use of ICE vehicles was introduced.

On 6 April 2022, this levy was increased to 9c/l for petrol and 10c/l for diesel and is payable in addition to other road-related taxes such as the general fuel levy and the road accident fund levy.

Manufacturers and road users can expect the taxes imposed on ICE autos to grow in the coming years, said CDH, and “the likely effect of this is that each person in the petrol/diesel vehicle manufacturing supply chain, including the end-user, will potentially have to pay more for the vehicle and for the fuel necessary to use such a vehicle.”

Moreover, the department of transport earlier in 2022 proposed further investigations of “additional and innovative” funding strategies for traffic management.

“It was announced that a traffic-management levy to vehicle licence fees and fuel sales would be investigated,” said CDH.

“Interestingly, this potential new proposed levy may not impact electric vehicles especially if it is introduced with reference to fuel sales which could further encourage the uptake of electric vehicles in South Africa.”

EV adoption is therefore expected to increase along with the rise in emissions-based levies in the country, and if local manufacturers do not want to be left behind, they must take advantage of the existing legal framework to gain a competitive edge in the currently-minuscule EV-building industry.

Keyword: Manufacturers can take advantage of current laws to build electric cars in South Africa

CAR'S NEWS RELATED

Best cars for a 'Love Bug' remake

Tennessee’s Yard Art The Thorndyke Special The Hot Rod The Hippie Van Jim’s Lamborghini Growing up, it’s safe to say my absolute favorite movie was Disney’s “The Love Bug.” As a kid living in a world before Pixar’s “Cars,” it was pretty much the best car movie. I loved ...

View more: Best cars for a 'Love Bug' remake

Audi timing belt tensioner prompts Utah bomb squad visit

An aftermarket timing belt tensioner found in a Salt Lake City apartment prompted a visit from the bomb squad this week after it was mistaken for a potential explosive device. Police partially evacuated the apartment complex in which it was found “out of an abundance of caution” and called ...

View more: Audi timing belt tensioner prompts Utah bomb squad visit

2023 GMC Sierra HD 2500 and 3500 will get more expensive

GMC Sierra HD pickups are about to get more expensive again after recently becoming more expensive, according to GM Authority. In July, GMC and Buick raised the prices on certain vehicles in their lineups anywhere from $975 to $1,675 by making the previously optional OnStar a standard feature. Next ...

View more: 2023 GMC Sierra HD 2500 and 3500 will get more expensive

Our week with EVs: Recapping the diverse collection of electric cars we tested

Mercedes-Benz EQB First Drive Review: Next electric Benz is a little different 2022 Chevy Bolt EV Road Test Review: Time to play EV, gas or airplane 2023 Genesis GV60 Road Test Review: The third of Hyundai Group’s E-GMP EVs is the fastest, but softest It may be hard to ...

View more: Our week with EVs: Recapping the diverse collection of electric cars we tested

Europe car sales lowest since 1996 after 12-month decline

BERLIN – Europe registered the lowest number of new passenger cars in the month of June this year since 1996 at just over 1.06 million vehicles, with some carmakers seeing sales drop by nearly 50%, data from Europe’s automobile association showed on Friday. Volkswagen Group was the hardest-hit major ...

View more: Europe car sales lowest since 1996 after 12-month decline

More Than Just A Carmaker: Toyota Motor PH Launches Toyota Mobility Solutions

Automotive industry leader, Toyota Motor Philippines Corporation (TMP) inaugurated today Toyota Mobility Solutions Philippines, Inc. (TMSPH), a wholly owned subsidiary that will be a provider of mobility-related services. TMSPH ventures into the development and offering of a range of ‘new mobility solutions’ that will enhance Toyota as a brand ...

View more: More Than Just A Carmaker: Toyota Motor PH Launches Toyota Mobility Solutions

'F1 22' feels fast and familiar | Gaming Roundup

‘F1 22’ impressions ‘Construction Simulator’ is launching Sept. 20 Autoblog may receive a share from purchases made via links on this page. Pricing and availability are subject to change. This week in racing game news: ‘F1 22’ impressions At its core, “F1 22,” the latest installment in the F1 ...

View more: 'F1 22' feels fast and familiar | Gaming Roundup

Watch a single-engine plane crash-land on 91 Freeway in California

A single-engine Piper Cherokee airplane was forced to crash land on the 91 Freeway in California after losing power about 45 minutes outside of Los Angeles. Yes, that means this was a very busy highway, practically bursting at the seams with traffic. No, amazingly nobody died, either in the ...

View more: Watch a single-engine plane crash-land on 91 Freeway in California

Ford files 'Mustang Dark Horse' trademark application

Make adventures more comfortable with high-quality Jeep grab handles

New Lucid Air variant to debut & Stealth Look to be on display during Monetary Car Week

Chevy offers incentives to prevent Corvette Z06 flipping

Average U.S. gas price falls below $4/gallon

German court: SUV driver must pay more than a car for running red light

Australian vehicle crash tests to include underwater performance

Toyota C-HR rumored to get revamp next year and an EV version

Geely's electric Zeekr 009 is an EV Alphard we never had; 700 km, 542 PS, top speed 190 km/h

A Newey, Brawn and Anderson row that shows F1 doesn’t change

Sorry, EV buyers, you won't get to pick your own pedestrian safety sounds

There won't be enough copper to meet climate goals, study indicates

OTHER CAR NEWS

;
Breaking thailand news, thai news, thailand news Verified News Story Network