The National Treasury on Tuesday denied a request by the local automotive industry to exempt double cabs and small pick-ups (bakkies) from a new carbon dioxide (CO₂) emissions tax, to be implemented on September 1.

Estimations were that this tax would add around 2,5% to the price tag of new vehicles.

The local automotive industry and Treasury had been at loggerheads over the implementation of the tax on pick-ups, as industry believed it was applicable only to passenger vehicles, adding that there was no data available on CO₂ emissions for the light commercial vehicle segment, which included pick-ups.

However, Tuesday's announcement served to tell it otherwise.

"It was always the intention that the definition of passenger vehicles would include double cabs and, by inference, small bakkies, because these are often used as passenger vehicles," the Treasury said in a statement.

"In addition, the National Regulator for Compulsory Specifications, a subsidiary of the South African Bureau of Standards (SABS), has also confirmed that data on CO₂ emissions expressed as g/km is available for all vehicles. It is also possible to calculate a vehicle's CO₂ emissions based on its engine size. Since most small single-cab bakkies and their double-cab equivalents have similar engine sizes, these two categories of vehicles should be treated the same for the purpose of the vehicle CO₂ emissions tax. Against this background, the request by the industry to exclude double-cabs and small bakkies from the vehicle CO₂ emissions tax can, therefore, not be accepted."

Treasury said that the aim of the green tax was to discourage the use of vehicles which were not fuel efficient, and to motivate the shift to more fuel-efficient ones.

It added that the CO₂ vehicle emissions tax would be collected and paid over to the South African Revenue Service by the vehicle manufacturers and /or importers.

A part (or all) of the CO₂ vehicle emissions tax was, therefore, likely to be built into the vehicle price tag.

Treasury said it would be "good practice" if dealers could reflect on the invoices to their clients the CO₂ emissions of each vehicle, and the estimated total CO₂ emissions tax.

The CO₂ tax was expected to earn the national fiscus an estimated R450-million in the 2010/11 financial year. Cars and bakkies would be taxed, based on their certified CO₂ emissions, at R75 a g/km for each g/km above 120 g/km.

The tax should favour the sale of vehicles with smaller engines, which used less fuel, and therefore emitted less CO₂.

The tax would, for example, increase the retail price of a 1,3 sedan by roughly R1 500, while a petrol-based V8 4 x 4 sports utility vehicle might carry an additional charge of around R19 000.

Few vehicles available in the South African market met the 120-g threshold.