Times Of Swaziland: GOVT: ONLY 8 000 ‘DUBAIS’ FOR DEALERSHIPS PER YEAR

GOVT: ONLY 8 000 ‘DUBAIS’ FOR DEALERSHIPS PER YEAR
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 BY STANLEY KHUMALO on 04/12/2020 01:23:00


MANZINI – Import car dealerships’ victory has been short-lived as government
wants them to collectively import 8 000 cars per year.
This means that all registered import car dealerships, estimated to be over 150,
will in total purchase 8 000 vehicles per year. This is according to the new set
of terms and conditions for import car dealerships announced by the Minister of
Finance, Neal Rijkenberg.
Rijkenberg, through Eswatini Government Gazette Extraordinary No.174, introduced
Legal Notice No. 315 of 2020, which is in line with the Import Control Order of
1976 (Order No.12 of 1976).
This legal notice may be cited as the Used Motor Vehicles Import Specification
Notice of 2020 and it came into effect on December 1, 2020. It limits the amount
of grey cars that can be shipped into the country.
Legislation
Leading to the introduction of this new piece of legislation, import car
dealerships were said to be importing in excess of 22 000 vehicles per year.
The grey cars, popularly known as ‘Dubais’ to the local population, are
imported from Europe or Asia, especially Japan and Singapore. In most of
sub-Saharan Africa countries, the imports satisfy demand for mobility while many
public transport systems are rudimentary and newer models are not affordable to
many in the growing middle class.
“The importation of used motor vehicles requiring a permit shall not be older
than the years specified in the schedule at the date of its purchase,” said
Rijkenberg.
The minister further said: “The importation of used motor vehicles shall be
restricted to 10 000 motor vehicles per year.”
He said per year, individuals buying the vehicles abroad - direct from some of
the suppliers – would only be permitted to import 2 000 vehicles in total.
“All individuals shall collectively be restricted to 2 000 motor vehicles per
year,” he said. Also, Rijkenberg said all dealerships of used motor vehicles
shall collectively be restricted to a maximum of 8 000 motor vehicles per year.
This new legal notice, according to Rijkenberg, demands that an application for
an import permit shall be made in writing to the Principal Secretary in the
Ministry of Finance, Sizakele Dlamini. This application shall be made prior to
the purchase of the used motor vehicle.
Victory
This new legislation came just a week after import car dealerships had claimed
victory over  Legal Notice No. 183 of  2020, titled the Import Control Order
1976 (Order No. 12 of 1976). The notice was titled ‘The Used Vehicles Import
Permit Specification Notice, 2020 (Under Section 3).
It has since been revoked by the new Legal Notice which also revoked Legal
Notice No. 80 of 2012. The former had been brought to life on August 28, 2020.
In October, Rijkenberg had informed parliamentarians that government only
collected E2.9 million taxes from import vehicles despite that it is a E1.1
billion industry.
The minister said this was despite that the industry imported on average 22 000
vehicles per year, of which half the volume was older than seven years.
Rijkenberg said this industry was valued at about E1.1 billion and part of this
amount left the country. He explained that the challenge with the second-hand
import motor vehicle industry was that cash was used mostly.
The minister further said from the imports that entered the country, government
had collected E2.9 million tax and employees in the industry had contributed
about E131 000 through pay-as-you-earn (PAYE). He said this was because most of
the employees in the industry earned less than E3 000. Furthermore, he said
government had collected E56 million from Customs taxes.
On the other hand, following the pronouncement of the legislation, some
legislators bemoaned it, stating that it would regress the progress made by the
citizenry in terms of procuring vehicles and also establishing their businesses
as import vehicles were cheaper for small and medium enterprises (SMEs).
Expensive
Some Members of Parliament (MPs) said this was a move that would set the people
against government against the people. They lamented that the new law would make
procuring vehicles more expensive for the masses as they would approximately
cost over E100 000. This amount, the legislators claimed, was too high for an
average citizen as a majority of the working class earned between E3 000 and E10
000. The politicians purported that for an average employee, the proposed
lifetime of the imported vehicles would be to their detriment.