CAR prices will probably go up by about 2% on Wednesday when the new emission tax kicks in.

Confusion still reigns despite the minister of finance Pravin Gordhan's meeting with carmakers last week to clear up a misunderstanding on whether bakkies are passenger or commercial vehicles.

One of the issues carmakers are still unclear on is whether the tax will be R75 per gram of carbon dioxide per kilometre over 120g/km, or in fact R85.50 because VAT will be added to the new tax.

Commercial vehicles are to carry a higher tax of R100 for every g/km over 175g/km.

Double cabs will carry this tax from March next year. Other light commercial vehicles, single cabs and light vans will be subject to the tax at a date still to be decided.

Toyota spokesman Leo Kok said the new tax, which comes into effect on September 1, was expected to raise prices by about 2%. "Our view is we are getting taxed on something we have no control over. Toyota makes cars locally that comply with European emission standards for export. We cannot sell them here because our fuel refineries do not make petrol that meets Europe's environmental laws.

"We feel rather than tax cars, the government should look at upgrading our refineries. Taxing fuel rather than cars would be fairer: a bigger share of the carbon tax would be paid by people who drive more, and therefore pollute more."

The Treasury said in a statement on Thursday: "The meeting agreed on the need to expedite the availability of cleaner fuels in South Africa. Emerging economies such as China, Brazil and India have made significant progress with the introduction of cleaner fuels, which are especially necessary to help improve local air quality. Although cleaner fuels do not directly reduce carbon dioxide emissions, the need for cleaner fuels to improve fuel efficiency is important. The introduction of the latest fuel-efficient engine technology, which is directly related to carbon dioxide emissions, requires improved fuel quality."

A concern carmakers have is that the government has given no indication how the money it raises from this new tax will be spent. They would be happier if it was earmarked for cleaner fuel.

"Confusion arose from the discrepancy in the definition of a passenger vehicle or motor vehicle in the VAT Act and the Customs and Excise Act. The VAT Act's definition includes double cabs, while the Customs and Excise Act does not," the Treasury said.

Gordhan declared that double cabs were commercial vehicles, giving a concession that only passenger vehicles would carry this tax from September, and commercial vehicles from March.

Minibus taxis are currently excluded from this tax as they are predominantly used for public transport. However, the position of minibus taxis will be reviewed when all other light commercial vehicles become subject to the tax.

Gordhan said passenger cars from Wednesday and double cabs from March, that cannot provide certified carbon dioxide vehicle emissions data, will be subject to a tax based on a proxy calculation, largely based on engine size. Such a proxy tax would include a significant penalty provision.