Local tyre prices are expected to rise considerably as a result of taxation
Image: AA
Grappling with the fuel hikes throughout the year, South African motorists will also have to dig deeper for maintenance costs since import tyre prices are on the unexpected increase as a result of a protest made by the South African Tyre Manufacturers Conference (SATMC).
Image: AA
As a result of higher duties on tyres imported from China, South African motorists will have to bear the brunt of an inevitable price increase for the crucial safety component of a vehicle. The Automobile Association (AA) of South Africa states that these problems are a symptom of poor management of our local macro-economy.
The government recently announced the addition of a 38,33% excise duty to tyres imported from China. This is on top of existing excise duties of between 25% and 30%. Tyres sold locally will now have an excise loading of between 63,33% and 68,33%.
The increase in excise duties comes after the South African Tyre Manufacturers Conference (SATMC) argued to the International Trade Administration Commission (ITAC) that tyres were being imported to South Africa at “unfairly low prices”. This, SATMC says, is damaging the local tyre manufacturing industry.
However, the Tyre Importers Association of South Africa (TIASA) says even local manufacturers import up to 80% of the variety of tyre models they sell anyway and has questioned the rationale behind the increased taxation.
Watch a news interview with Charl de Villiers of TIASA going into more detail on the topic here.
The AA says while the wrangling over the reasons for the increased excise duties continues, already financially-stretched consumers will, ultimately, bear the brunt of the decision.
“Increased fuel prices have seen food prices climb and resulted in higher private and public transport costs. Those with private transport will now have to pay more for tyres – essential safety equipment on vehicles – something we don’t believe will happen. Public transport providers such as busses and taxis will either not pay the new prices or merely pass the increases to their passengers. Both options are unacceptable,” says the AA.
The Association says it supports calls from organisations such as TIASA that the decision to add the extra excise duties be reversed and alleviate tyre prices.
“Government’s approach should be geared towards creating jobs and a sustainable economy, supported by tougher measures to curb corruption and to ensure the proper allocation of funds. In our view the issues around tyre pricing are systemic of deeper issues within the management of the country’s economy and consumers are now, again, being asked to carry the burden. Government should immediately reverse the introduction of the additional excise duties, and find a better, more long-lasting solution to the problem in the tyre sector that doesn’t impact negatively on consumers,” the AA concludes.
