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AILING ECONOMY HINDERS AUCTIONS

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MBABANE – Bidders failed to take advantage of the Nedbank cars auction as most of the vehicles on offer failed to attract bids.
Duly instructed by Nedbank Swaziland Limited, Rexy’s Investments intended to dispose of eight motor vehicles by public auction at Afritool, Sidwashini (past Interfreight opposite World Vision).


The auction was conducted by Rexy’s Investments Director Melusi Qwabe starting from 10:30am and nearly 20 people were in attendance.
Bidders who were interested at participating at the auction were expected to pay a refundable deposit of E3 000. Viewing of the motor vehicles was conducted on Tuesday between 1pm and 4pm at the same premises where the auction was conducted.


The auctioneer said prices were affordable when considering the value of motor vehicles on offer at retail price and condition. However, due to the state of the ailing economy, which has prompted most emaSwati to be economically conscious on how they spend their hard earned cash, only three cars were sold.
All the motor vehicles that were up for grabs were in good running condition. A motor vehicle that attracted the highest bid was the Toyota Hilux 2.4 SRX GD S/C which was eventually sold for E275 000 from a reserve price of E220 000. The lowest bid received by Qwabe was for the faulty 2016 Hyundai i10 GLS which was sold for only E3 000.


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Qwabe announced that they were still open to bids from interested buyers for the vehicles that did not attract bids. It should be mentioned that auctions where premium vehicles are sold at low reserve prices than what the retail market has to offer continue to gain interest among bidders. This could also be attributed to the disclosure by ‘dubai, car dealerships that they could soon hike their prices as a result of the import levy, which increases their business costs.


‘Dubai’s as they are commonly known locally, refer to motor vehicles imported from countries outside Africa, especially Asia. Government recently introduced an import levy on non-Southern African Customs Union (SACU) used vehicles of three and six per cent levy, respectively.
The levy being collected by the Eswatini Revenue Authority (SRA) was imposed strictly on all motor vehicles being imported into the kingdom from outside the region.


In exercise of powers conferred by section three of the Import and Control Order of 1976, the three per cent of total value gets imposed on every motor vehicle that is between six and ten years old.


For a motor vehicle that is 11 and 15 years old, a levy of six per cent of free on-board customs value gets charged. In the E22.9 billion budget for the 2019/20 financial year, Finance Minister Neal Rijkenberg said they anticipated an increase in revenues collected through imposition of the imported motor vehicles levy. “The levy on imported vehicles is projected to grow from E6 million to E10 million whilst other licences and other taxes are expected to reach E90 million,” said Rijkenberg.


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Reacting to the projections, the common stance among operators of dealerships was to the effect that ‘dubai’s would continue to become more expensive than before the levy imposition. They promised to hike prices to cushion effects of the levy which attracts more business costs.


One of the dealership owners, who preferred to be quoted only as Mohamed, said since introduction of the levy, profitability of the car dealership business had been declining.


He said the profit drop would also be compounded by the announcement by government to the effect that value added tax (VAT) would also be charged on electricity and the increase in fuel tax by E1.20 per litre among other consumptive taxes. Mohamed said he was worried that the increases would prompt consumers to spend less. “Entrepreneurs in the ‘dubai’ selling business will have to be determined to thrive because the costs continue to rise,” said Mohamed.


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