A proposed change to fringe benefit taxation of company cars after
March 1 could result in good car sales up to the end of February.
The fringe benefit tax
change aims to base the taxable value of the private use of a company car on the
car’s retail list price, instead of the discounted price the company paid.
The change will not impact current company cars, but vehicles
acquired and used by employees for private purposes from March 1 will be
affected.
Since the listed retail prices of vehicles are considerably higher
than discounted bulk price companies get, dealers expect a slew of orders for
new company cars in advance of the tax change.
For the rest of the year, the National Association of Automobile
Manufacturers in SA (Naamsa) projects four percent growth in aggregate new car
sales in 2015.
Naamsa expects a weaker rand to make life especially tough for
local manufacturers and CKD assemblers, but an expected improvement in exports
could see domestic production of motor vehicles rise from the approximately
542 000 vehicles produced last year to close on 600 000 vehicles by December
2015 — an improvement in vehicle production of about 10,7%.
The association expects demand by the car rental industry to remain
strong in the year ahead, which should make a positive contribution on the back
of further growth in tourism and business travel.
