ABOUT 8 ‘DUBAI’ DEALERSHIPS CLOSE SHOP AFTER GOVT’S CONTROL LAW

MANZINI – About eight import dealerships have closed shop in Matsapha following the limitation of automobiles that can be shipped into the country.

This figure was established during a visit by this publication to some of the affected dealerships. Since the implementation of the stringent controls by government, to minimise the importation of vehicles from abroad, only 1 148 automobiles gained entry into the country. This follows that government passed a legislation which states that import car dealerships per month would collectively bring in 8 000 vehicles per year while individuals could only bring into the country 2 000 automobiles. This is courtesy of 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).

Legislation

Leading to the introduction of this piece of legislation, import car dealerships were said to be importing in excess of 22 000 vehicles per year. However, since the advent of the new order, this amount has been shed by over 150 per cent as only 10 000 grey cars could be imported per year. Following this stance by government, Communications Officer in the Ministry of Finance, Setsabile Dlamini, said only 1 077 vehicles were imported by import car dealerships to date while individuals procured 71 automobiles abroad. This equals 1 148 vehicles that have gained entry into the kingdom from abroad to date. In light of this, a number of import dealerships proprietors have closed their businesses as they claimed that they were operating at a loss. The loss, it was claimed, came from the limitation of the number of vehicles to be imported and the increment in free-on-board (FoB). This levy was increased in excess of 300 per cent by government in December, along with the limitation of imported vehicles permitted into the kingdom. The Ministry of Finance introduced Legal Notice No. 314 of 2020, which could be cited as Imported Motor Vehicles Levy (Imposition) Notice of 2020, which should be read with the Fourth Schedule of the Customs and Excise Act of 1971.

The legislation states that the import levy shall be imposed on every imported used motor vehicle. It states that about eight years from date of manufacture, it shall be 20 per cent ad-valorem import levy FoB value.
In light of this, Imitiaz Sahi of the Eswatini Import Car Dealership Association (EICDA) said most dealerships were finishing the stock they had as leasing space and doing business in the country was no longer viable.
The businessman said the challenge was also the increment in expenditure of bringing the vehicles into the country as freight costs and the FoB levy minimised their profit margins.

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