Reports say buying your car in SA could prove more taxing. In this blog we explore the reasons why car tax in SA might make local less ‘lekker’. For many South Africans, whether it’s just to get from A to B or to do the trip in luxury, being able to afford a car is a major motivator! But, could SA’s car tax be the biggest obstacle between you and your dream car?
Tax on Tax on Tax
Income tax is the initial tax that’s infamous among everyone that earns an income. And just as you start to get over the fact that the government takes a cut of your hard-earned cash before you even see it, your car’s debit order is deducted. You love your car, but if you’re honest, as we are, you die a little inside and question why you really need a car every time that debit order is activated. But what will really break your heart in the next paragraph is the realisation that a significant portion of the (already-taxed) salary that is spent on your car also goes to (you guessed it) the taxman.
How Much More Tax Do You Really Pay to Own & Drive Your Car
Let’s say you’re 35 years old, living in your favourite city, doing what you love and earning R35 000 per month (you go,). The first tax you’ll pay, as we have established, is income tax. That’s about R6 841 to SARS every month, which leaves you with R28 159 to live your life. Now, let’s say the car dealer used his 12 years of sales experience to convinced you to autograph the dotted line for the new Toyota Hilux Xtra Cab, that retails for R471 000. The next set of taxes you are going to pay are the ones that will hurt you the most.
According to calculations from NAAMSA, you will pay approximately R141 000 in taxes for your new Hilux, out of the total price of R471,500 (ouch!).
This includes:
- VAT– 15%
- Ad Valorem Tax– Calculated on a per-vehicle basis
- CO2 Tax – 2,5%-6%
- Import Duty on Vehicles– 25%
- Import Duty on Components– 20%
Next Up – Fuel Tax
The South African taxman has been driving a hard car-tax bargain for eons! And fuel costs have been burning a hole in our pockets for just as long. But just how much of that is tax? Well, up to one-third of the total cost of every litre of petrol goes to taxes and levies!
- Fuel Levy:R3,93 per litre
- Road Accident Fund Levy:R2,18 per litre
- Customs and Excise:4 cents per litre
- Demand-Side Management Levy:10 cents per litre
- Other Levies: 1 cent per litre
Is Your Dream Car Cheaper in Other Countries?
Let’s say, after having bought your new Hilux, you started dreaming about the Mini Cooper 5-door Hatch. Now that you’ve done your research on car tax in SA, you’re wondering if it might be cheaper to buy your dream car in another country. And let’s say you have family in England so that’s where you decide to look.
In South Africa you can drive away in your dream car from about R439 500, whereas in England, you could spin off in your new Coop for as little as £18 105 (R372 434,52).
