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Illegal vehicle imports siphoning billions from fiscus

Apr 03, 2023 National Automobile Dealers’ Association (NADA), Retail Motor Industry Organisation (RMI).


Illegal vehicle imports siphoning billions from fiscus

 

The already overstretched South African fiscus is losing billions of rand in potential income in the form of taxes and levies due to the illegal importation of motor vehicles. 

 

A recent estimate is that there are hundreds of thousands of these illegally imported vehicles operating on local roads. If these buyers had bought new or used vehicles through official channels instead of illegal imports, and paid annual license fees, the benefits to the fiscus would have been huge, considering how long this practice has been going on. Half a million foreign registration plates have been recorded on South Africa’s roads in the last five years, an alarming statistic given that the country’s official vehicle parc is made up of around 13 million units.

 

According to the National Automobile Dealers’ Association (NADA) there are shocking statistics related to the illegal importation of these illegal vehicle imports such as the fact that 220 000 vehicles brought in through South African ports have never been exported to the neighbouring countries they were intended for, while a further 214 000 entered South Africa across a border more than 12 months ago and have not returned to their country of registration. 

 

It is also calculated that the problem continues unabated with more than an estimated 50 000 vehicles joining the illegal vehicle parc each year. These illegal imports are vehicles imported from another country through channels other than the those of the manufacturer or official distributor. Generally, these are used vehicles. Used vehicles may not be brought into South Africa for sale, but may be imported via a South African port with the intention of exporting them to a neighbouring country and this is where, it is believed, loopholes are found.

 

There are strong regulations in place regarding the importation of pre-owned vehicles or used parts, but unfortunately there is little control over so-called illegal imports that come into the country through a multitude of border posts. Strict control measures in South Africa supposedly ensure only a limited number of legal import permits for used vehicles are issued annually. These are for immigrants, residents and nationals returning to South African, specially adapted vehicles for those with physical disabilities, vehicles inherited by South African citizens and nationals as well as vintage and collectors’ cars and racing cars. Except for special cases, left-hand drive cars are not permitted to enter the country.

 

Finding ways of tightening up border controls to fight this illegal practice is not only in the interests of the local automotive industry, but also a legitimate way of increasing income for the fiscus, which is in the national interest.

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