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The South African Tyre Manufacturers Conference (SATMC) notes the announcement by National Treasury (22 September 2016) that the implementation of the environmental tyre levy will be postponed to become effective from 1 February 2017.

The SATMC has always supported the governance principles underpinning the announcement in the 2016 Budget tabled in Parliament by the Minister of Finance, that the environmental tyre levy would be implemented through the Customs and Excise Act.

This will enable:
1.  1. the tyre manufacturing industry to pay the levy directly to the South African Revenue Service (SARS), for depositing into the National Revenue Fund, as with all other environmental related taxes.

2.  2. the revenue raised through the levy to be appropriated to the Department of Environmental Affairs via the national budgeting and appropriations process, for funding the implementation of the tyre waste management programme to contribute to reducing waste tyre disposal on landfills and to build a viable circular economy from the recycling of end-of-life tyres.

Under these arrangements, the tyre manufacturing industry will continue to fulfil its legally obligated extended producer responsibility to pay the prescribed levy of R2.30 per kilogram of tyre.

Our industry has consistently advocated for the direct payment of the levy to SARS, in support of government’s efforts to achieve improved transparency, accountability, monitoring and evaluation in the utilisation of the funds raised by the levy to give effect to our legally obligated extended producer responsibility.

This is imperative, given the value of funding involved. Since the inception of tyre levy payments, the total industry levy contribution is estimated at over R2 Billion or  between R500 – R600 million per annum.

Despite the postponement of the effective implementation, we recognise that this reform of the levy payment arrangements is aligned with Government’s existing policy intent applicable to the levy, as contained in the National Pricing Strategy for Waste Management and the Framework for Considering Market-Based Instruments to Support Environmental Fiscal Reform in South Africa.

We welcome and value the opportunity that the new implementation date provides for further consultation between industry and Government on technical, operational and transitional matters. This will assist in ensuring the effective and efficient implementation of the environmental tyre levy and avoid any unintended consequences in the operationalisation thereof.

As an industry body, we welcome and appreciate the expressed support and endorsement given to our position in this regard by respected industry peers within the broader automotive sector who also contributors to the levy. These include:

• National Association of Automobile Manufacturers of South Africa (NAAMSA);
• the Retail Motor Industry (RMI); and
• the Tyre Importers Association of South Africa (TIASA).

Issued by SATMC