Windhoek — The introduction of carbon emission tax in South Africa is causing confusion in the Namibian motor vehicle retail industry, with some accusing the Ministry of Finance of failing to take leadership.

South Africa introduced a tax on luxury and four-wheel-drive vehicles that would eventually see buyers forking out between N$14000 and N$25000 in addition to the normal selling price.

The carbon emission level of the car model determines the additional tax money that buyers have to pay.

However, the tax is only for South Africa and not for Namibia, where there are no green tax laws. Nevertheless, Namibian motor vehicle dealers buy their cars from South Africa, where all vehicle manufacturers are required to pay the tax and pass on the costs to dealerships through the selling price.

The tax applies to all sports utility vehicles, such as Land Rovers, Mercedes-Benz ML class, the BMW X-class, Range Rovers, Nissan Frontier and Toyota Prado models.

Sources within the Namibian vehicle retail industry say the Ministry of Finance "has only issued a circular in which it advised that all Namibian dealerships must inform South African manufacturers not to include the emission tax in the invoices".

The ineffectiveness of the circular is already visible from the different position taken by Namibian vehicle retailers, of which some say they would pass on the tax to consumers, while others are negotiating not to.

Leading vehicle retail group Pupkewitz Motors is one of the dealers that would pass onto consumers the costs of a South African tax regime, even though Namibia has no such tax regime.

"Any new vehicle from South Africa before September 1 will not incur the CO2 emissions tax, however, vehicles purchased after that date will unfortunately be subject to this new tax levy," said Pupkewitz Motors.

Under the new South African tax regime, cars with much higher carbon dioxide emissions would be charged between 0.6 percent and 4.1 percent of the total price, with the percentages based on how much CO2 the car emits.

In addition, as of April next year, the South African treasury would also levy carbon tax on all light commercial vehicles and four-wheel drives such as Nissan Navara, Toyota double cab, and GWM Steed range.

Other Namibian vehicle retailers such as Ford Motors, M+Z, Audi, and Volkswagen say they are in discussions with their South African manufacturers on the issue.

Ford Motors' Nicolai Celento says their position is that the emission tax cannot be passed to Namibian consumers, because legally this is a South African tax regime and not a Namibian regime.

"We are currently in negotiations with Ford South Africa on this matter," said Celento.

The industry is also worried about the possibility of price inflation - where the price of these cars would increase through the indirect inclusion of green tax, and ultimately double tax for Namibians should the Namibian government introduce its own green tax.