South Africa is losing billions of rands in income in the form of taxes and levies as a result of the illegal importation of motor vehicles.
It is currently estimated that hundreds of thousands of illegally imported cars are on the roads and are not contributing to the country’s overstretched fiscus through taxes and annual licence fees, said the National Automobile Dealer’s Association (NADA).
Siphoning funds
More than half a million cars with foreign registration plates have been recorded on South Africa’s roads in the last five years by the Vehicle Intelligence Data System (VIDS) – an alarming statistic given that the country’s official vehicle parc is made up of around 13 million units.
Another statistic revealed that more than 220,000 automobiles that were brought into the country through its ports, supposedly to be exported to neighboring markets, never reached the countries they were intended for.
A further 214,000 units entered South Africa through one of its land borders more than 12 months ago and have not returned to their countries 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, said NADA.
These illegal imports are vehicles imported from another country through channels other than those of the manufacturer or official distributor. Generally, these are used vehicles.
In South Africa, used autos are not allowed to be brought in for sale, but may be imported through a port with the intention of exporting the car to a neighboring country, and it is believed that this policy is being exploited as a loophole.
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, according to NADA.
Strict control measures are in place to ensure that only a limited number of legal import permits for used cars are issued annually. These permits are supposed to be used by immigrants, residents, and nationals returning to South Africa, vehicles specially adapted for those with physical disabilities, cars inherited by South African citizens, and vintage or collector models that cannot be found anywhere else.
With few exceptions, left-hand drive automobiles 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, concluded the organization.
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