One of the lead indicators of GDP activity in any economy is the sales of new vehicles and according to the National Association of Automobile Manufacturers of South Africa (NAAMSA), new car sales sales in February 2011 grew by 25% compared to sales in February of 2010. This clearly indicates that the SA economy is running at relatively high octane levels. Of course, more vehicles on the road means more fuel consumption and more fuel taxes to be collected by government.
A fact that is easy to miss out on in the midst of all thus hype about our economy is that from 1 March this year, the government will start to levy a CO2 tax on all new light commercial vehicles. This means that the SA Revenue Service (SARS) will increase its revenue pool, albeit by a small margin, but an increase nonetheless. What is not clear, however is whether or not government will invest this additional money in initiatives related to CO2 emissions reduction or other unrelated social spending items.
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