South Africans are still paying a ‘luxury vehicle’ tax that hasn’t been adjusted for inflation in over 30 years.
South Africa’s “luxury goods” tax, which applies to cars over R250,000 and has remained unchanged for almost 30 years, is increasing the high cost of vehicles in the country.
During the Covid-19 pandemic, car manufacturers faced reduced demand, prompting them to increase prices to sustain their businesses. South African economic conditions exacerbate car import costs due to high taxes, import duties and a weakening rand exchange rate. Therefore, a BMW 320i was not considered a “luxury” for the purposes of ad valorem in 1994, while a Jaguar was.
“Moreover, a temporary removal of import duties on EVs could further boost consumption and prompt manufacturers to consider local production setups,” he said.
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