Mar 01, 2019 Naacam show, automotive, aftermarket, spares, garage, workshop, cars, South Africa
The difficult economic situation Minister Mboweni found himself in last week when presenting his first annual budget, allows a reflection of the vital role needed to be played by productive investment in South Africa’s economy. Fiscal prudence is priority, but nothing other than growth in local industry will deliver more breathing space for future budget proposals.
In that context, the announced continued support for industry incentives such as SEZ’s, the Jobs Fund, clothing and textiles etc, is welcomed, though NAACAM is of the opinion that the Minister had space in his tax policy to further incentivise deep industrialisation. A missed example of this is a proposal to introduce a special tax incentive to direct investment into high value adding automotive component manufacturing segments such as drivetrain and telematics segments. This was a recommendation out of the recently announced SA Automotive Masterplan 2035, but one that has not yet been finalised for implementation. NAACAM also notes the intention around looking to make locally manufactured vehicles cheaper relative to imported vehicles out of a proposal to re-examine the tax treatment, for ad valorem customs and excise duty purposes, between imported and locally manufactured vehicles.
NAACAM does welcome the announcement of a process to draft an Environmental Fiscal Reform Policy Paper in 2019. Manufacturers, especially those in the tyre sector would welcome the opportunity to engage with this, given the impact of waste regulations and management on their various operations.
It is also key that the budgetary commitment made to SOEs, especially ESKOM, bears result in the form of a service delivery to industry that re-asserts SA competitiveness in a globalised and rapidly changing manufacturing landscape.
All things considered it was a budget that looked to balance many different platforms, and NAACAM trusts that Minister Mboweni’s clear intention to reign in unnecessary public expenditure gives a level of confidence to the ratings agencies, who have not been kind in their more recent assessments of SA’s economy. Further downgrades are an outcome that no-one, not least the automotive sector stakeholders, want to see, in an already fragile economic state of play.
Feb 05, 2025 0
Feb 04, 2025 0