16 November 2012

Namibia: Motorists to Pay Carbon Emission Tax

Windhoek — Starting next year motorists should expect to pay the carbon dioxide (CO2) tax on vehicles and tyres, following in the footsteps of South Africa, the first Southern African Customs Union (SACU) member country to implement the CO2 tax on vehicles, which it did in 2010.

Ministry of Finance representative Naomi Mujetenga said Namibia would for the next financial year impose the CO2 emission tax on all new and second hand vehicles.

An environmental tax would also be slapped on the non-energy saving light bulbs. "The collections will help strengthen the state's capacity to fund environmental programmes and other national development programmes," said Mujetenga during the environmental fiscal reform feedback meeting yesterday.

Treasury has been broadening and diversifying revenue streams, hence the introduction of environmental levies and taxes on vehicles for carbon emission on the basis of their carbon emission potential. Eventually the environmental levies would go on to be levied on things like bottles, plastic bags, cans and other environmental pollutant substances.

Mujetenga says through consultations it was decided to first commence with vehicles, tyres and non-energy saving light bulbs.

The ministry is conducting an impact assessment of the proposed taxes on plastic bags, bottles and glasses and the results are expected in February 2013.

All in all about 30 products are targeted for the environmental taxation, but Mujetenga says government would take into consideration the "ability to pay" to avoid placing an undue burden on consumers.

South African motorists are already forking out as much as N$25 000 on carbon emission taxes, in addition to the purchasing price on cars they buy. The engine size, the vehicle model and categorisation determine the actual value of the CO2 tax. Vehicles with much higher carbon dioxide emissions are charged between 0.6 percent and 4.1 percent of the total price, with the percentages based on how much CO2 the vehicle emits.

The chairperson of the Environmental Investment Fund (EIF) and Environmental Commissioner, Teofilus Nghitila, said Namibia's fragile ecosystem and vulnerability to climate change are the reason for the introduction of the levies. A recent projection by the University of Cape Town and the Intergovernmental Panel on Climate Change concluded that Namibia could lose a significant percentage of her annual total production value due to impacts of climate change.

"We therefore can no longer wait for the international community or those who are responsible for aggravating these impacts to provide resources to us," Nghitila said.

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