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IMPORT CAR DEALERSHIPS CAN ONLY BRING 10-YR-OLD CARS

07/02/2023 08:51:00 Stanley Khumalo

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MANZINI – Import car dealerships are now permitted to bring only vehicles manufactured a decade ago.

This follows the introduction of Eswatini Government Gazette Extraordinary No.174, Legal Notice No.315 of 2020, which is in line with the Import Control Order of 1976 (Order No.12 of 1976). This notice may be referred to as the Used Motor Vehicles Import Specification Notice of 2020 and it came into effect on December 1, 2020. This legislation rolled in the importation of grey cars over a period of five years. When introduced, the legislation stipulated that between December 1, 2020 to November 30, 2022, import dealerships have to bring into the country vehicles manufactured not more than 11 years ago. Since the last month of 2022, import dealerships are now expected to ship into Eswatini grey cars manufactured in 2013. The reduction in the years of manufacture of import vehicles shall again be implemented this year in December as it shall be decreased to nine years before the last lessening in December 2024 to eight years.

mitigation

This is part of the mitigation brought by the Ministry of Finance in hiking Southern Africa Customs Union (SACU) receipts. The import vehicles mostly sold in the country are sourced from Japan, Singapore and the United Kingdom. Leading to the introduction of this legislation, import car dealerships were said to be importing in excess of 22 000 vehicles per year; however, since its introduction, it has been said they have brought in less than 80 vehicles in three months. This is according to the Ministry of Finance second quarter report for this financial year ending March 31, 2023.

The report states that the import permit committee, which comprises members from Eswatini Revenue Service (ERS) – Customs and Income Tax Officials, Ministry of Commerce, Industry and Trade, Central Bank of Eswatini (CBE) received a total of 128 import permit applications, whereby 48 import permits were issued to individuals and 80 were issued to companies, including oil companies. It was stated that no import permits were rejected while the total value of goods imported was E302 million. The imported vehicles during the three months of July 2022 – September 2022 made a fraction of the stipulated number of grey cars. Legal Notice No.315 of 2020 also capped the importation of vehicles to 10 000. From this figure, 8 000 were to be imported by dealerships while the balance was set for individuals.

expensive

Also, following the introduction of the legislation it became expensive for import car dealerships to bring into the country automobiles older than eight years as their import levy was increased by 300 per cent. This is because the Ministry of Finance introduced Legal Notice No.314 of 2020 which increased levies for free-on-board (FoB). The legislation states that the import levy shall be imposed on every imported used motor vehicle. The vehicles older than eight years are those manufactured in years preceding 2011. It is worth noting that leading to the introduction of the legislation, import car dealerships were praying that government permits them to import used vehicles that were atleast 15 years while the Minister of Finance, Neal Rijkenberg, had issued a legal notice stipulating that the importation should be capped at seven years.

This was met with discontent (legal notice) which resulted in staging of protests at Parliament. Thereafter, joining the debate were politicians wherein they said government should atleast settle at vehicles manufactured within 12 years. Those aggrieved were employees of the import car dealerships and legislators, who argued that it was not in the interest of the public to set the limit of imported vehicles at seven years. It was said the majority of the citizenry depended on these vehicles and the limitation of the cars to be imported meant that they would not afford them.

This led to a parliamentarian select committee chaired by Lobamba Lomdzala Constituency Member of Parliament (MP) Marwick Khumalo to address the matter as well as ensuring the implementation of the resolution by Rijkenberg. The resolution between all parties was that the used motor vehicles that required permits shall not be older than 11 years at the date of purchase, with effect from December 1, 2020 to November 30, 2022. The limit reduction by one year would be staggered over a period of four years reaching the eight years in December 2024, which shall be in force until such time where government would deem it necessary to review after consultations with stakeholders.