MIDP amendment excludes 'dumpers' - Bell Equipment to lose out

ALAN PEAT
THE VEHICLE category for “dumpers” with an articulated chassis has been excluded from Motor Industry Development Programme (MIDP) export benefits under an SA Revenue Service (Sars) amendment to the harmonised customs tariff. According to information released to FTW by trade and customs consultants, Deloitte, this new provision excludes vehicles in the tariff subheadings 8704.22.90 and 8704.23.90 from participating in the MIDP.
The reasons put forward by the authorities are:
• The MIDP was originally designed solely for ‘on road’ vehicles;
• The dumpers are mainly used in mining and construction operations;
• There is a need to clarify the range of medium and heavy motor vehicles that may be manufactured under MIDP;
• The integrity and sustainability of MIDP in line with international trade obligations must be preserved;
• The manufacture of components for dumpers do not contribute to lowering costs of manufacturing medium and heavy vehicles under MIDP.
The local victim of the amendment is Bell Equipment, which, according to press reports, received MIDP rebates of R42-million in 2005 and R23-m last year.
But its inclusion in the programme was challenged by the US-based heavy vehicle manufacturers, Caterpillar – which is represented in SA by Barloworld.
Bell – which exports about half its annual vehicle output – is now out of the scheme as far as MIDP export incentives are concerned, but should still receive import rebates under other legislation, according to the National Association of Automobile Manufacturers of SA (Naamsa). Executive manager Norman Lamprecht told FTW that in the Sars amendment to the harmonised tariff “a special rebate provision has been created for components used in the manufacture of dumpers”.
But, while it’s an MIDP issue, Lamprecht was quick to stress that this is a separate piece of legislation and in no way refers to the contents of the MIDP review.
This is keenly-awaited by the SA motor industry, which is desperate to know its MIDP future after the current programme expires in 2008.
But the paperwork for this is still lying on the desk of the minister of trade and industry, Lamprecht added, and still has to progress through the office of the minister of finance for his approval, before it can go to Sars for implementation in its new form.