Illegally imported used vehicles cost SA billions in tax revenue every year

Illegal vehicle importation is a growing problem in South Africa.

The flow of used cars from their countries of origin across our borders means taxes and duties are dodged, which results in revenue loss for the government.

It also negatively affects vehicle sales for local dealers and manufacturers.

These illegal imports are destined for neighbouring countries, but the estimated 30 000 that illegally remain in South Africa cost the fiscus up to R8 billion a year in lost direct taxes, reports Moneyweb.

A plan by the automotive industry and government entities to shift the port of entry for imported grey and used vehicles from Durban to Maputo in Mozambique, is still 'a work in progress'.

In conversation with Bruce Whitfield, ENSAfrica tax executive Charles de Wet notes that significant import duties apply to new and used vehicle imports in South Africa.

"That ratio is 20-25%, so whatever the landing cost is, there's an additional tax cost collected by SARS and then VAT on top of that... Illegal importation has a big impact on tax collections."

"That money is lost forever. If you don't take vehicles through a port where they are properly declared, its' a number that adds up very quickly."

Charles De Wet, Tax Executive - ENSAfrica