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

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.

Post your comment

Your name:

Your e-mail address:

Add your comments:

Please enter the code you see in the image:

Image:

Code: