Illegal vehicle imports rob SA of billions

Illegal imports of thousands of vehicles are likely costing the South African fiscus about R4 billion in potential income from taxes and levies each year, according to Mike Mabasa, CEO of the National Association of Automobile Manufacturers of SA (Naamsa).

According to Mabasa, Naamsa works closely with the Department of Trade, Industry, and Competition to analyse data on vehicles imported via SA ports.

An estimated 50 000 vehicles are imported to South Africa illegally each year through channels other than those of the manufacturers or official distributors. These are generally second-hand vehicles.

Used vehicles may not be brought into SA for sale but may be imported via a South African port if destined for a neighbouring country. This creates a loophole for illegal imports as an estimated 220 000 vehicles brought in through SA ports have ended up not going to neighbouring countries, according to another industry body, the National Automobile Dealers' Association (NADA).

Another method of getting illegal vehicles into South Africa is via land borders. NADA estimated that 214 000 vehicles entered SA via land borders more than 12 months ago and have not returned to their country of registration.

Mabasa says Naamsa has similar estimates.

"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 the many border posts," it says.

Only a limited number of legal import permits for used vehicles are issued annually. These are for immigrants, residents and nationals returning to South Africa, specially adapted vehicles for those with physical disabilities, vehicles inherited by South African citizens and nationals, vintage and collectors cars, and racing cars. Except for special cases, left-hand drive cars are prohibited from entering the country.

But NADA says half a million foreign registration plates were recorded on South Africa's roads in the last five years.

Control

"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," says NADA. According to NADA, illegal vehicle imports are increasingly coming via Pakistan. They are usually Japanese brands.

"There is no history on the car. They could be good or very dangerous," NADA responded to News24.

Mabasa agrees that the issue of illegal vehicle imports is a big challenge. In his view, more law enforcement is needed, including having more roadblocks with the specific intention of identifying those vehicles which are not supposed to be on SA's roads.

Naamsa has asked Minister of Trade, Industry, and Competition Ebrahim Patel to take a closer look at the second-hand vehicle terminal at the Durban port and deploy additional law enforcement to prevent illegal imports from entering SA. In his view, it will help to deter the well-organised syndicates if their containers are confiscated.

Manasa also points out the threat to road safety these illegal imports bring. Often these are old cars which are not roadworthy. Often one cannot even find parts for them in South Africa. Illegally imported cars are also used for criminal activities as they are not in the SA vehicle register.-Fin24