Luxury vehicle threshold for ministers, premiers raised to R1. 1m

IOL News

21 hours ago

Finance Minister Enoch Godongwana and the National Treasury have increased the limit for purchasing of official vehicles for ministers, their deputies, premiers and MECs to R1.1 million from R800,000.
Image: Independent Newspapers
Ministers and their deputies in President Cyril Ramaphosa's Government of National Unity (GNU) executive can now buy luxury official vehicles valued up to R1.1 million after the National Treasury increased the limit from R800,000.
National Treasury director-general Dr. Duncan Pieterse revealed the increase in an instruction dated July 11, 2025, and which came into effect on Tuesday this week.
Late former finance minister Tito Mboweni announced the R800,000 cap (inclusive of value-added tax [VAT], maintenance plans and security upgrades) for official cars delivering the medium-term budget policy statement as part of government-wide cost-containment measures.
Treasury increased and adjusted the R700,000 threshold to R800,000 in the 2019/20 financial year.
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Pieterse said Mboweni's successor Enoch Godongwana is required, in terms of the guide for members of the executive (formerly the ministerial handbook), to consult his police, transport and state security counterparts to annually adjust and set the cost limitation for vehicles procured by members of the executive, who also include premiers and MECs.
'The minister (Godongwana) has adjusted the price limit for official vehicles from R800,000 to R1.1m inclusive of VAT, maintenance plans and security upgrades with effect from the date of this Treasury instruction,' stated Pieterse.
National and provincial government departments will provide details of all acquisitions related to the costs of vehicles procured for official use by members of the executive in their annual reports at the end of each financial year.
Treasury warned members of the executive and departments against purchasing vehicles of higher prices than the set price limit.
'Members of the executive are further prohibited from making personal additional financial contribution or through any form of creative or negotiated trade-in value to purchase a vehicle of a higher price while technically not exceeding the set price limit,' reads the instruction.
In addition, the instruction prohibits avoiding compliance by leasing vehicles of a higher threshold in lieu of a direct purchase and subverting the guide's provisions and the price limits by leasing through other means such as the Fleet Management Trading Entities or similar arrangements.
The guide sets out conditions as temporary arrangements under which hiring of vehicles may be considered in cases where official vehicles of a similar make and model are not available as may be purchased by departments.
This is not the first time Treasury has increased the threshold for official vehicles.
In September last year, Pieterse granted a deviation for the Eastern Cape provincial government to proceed with the purchase of a vehicle for official use by members of its executive limited to R900,000 inclusive of VAT, but excluding security features not exceeding a R100,000.
At the time, provincial departments were advised to liaise with the SA Police Service for the fitment of security features.
ActionSA MP Alan Beesley described the increase in the price threshold for official vehicles for members of the executive as simply unacceptable.
'With close to 50% of households going to bed hungry tonight, the luxury lifestyle of the executive is morally incomprehensible. Under the GNU, we have a bloated cabinet whose perks continue to increase,' he complained.
Beesley asked: 'How can the Cabinet tell hard-pressed South Africans to tighten their belts when their own belts are getting considerably looser? It is wrong on so many levels'.
He added that corruption comes in many forms, including the systemic abuse of taxpayer's money.
ActionSA has introduced the Enhanced Cut Cabinet Perks Bill to amend the Independent Commission for the Remuneration of Public Office Bearers Act to have regard to prevailing economic conditions.
Build One South Africa (BOSA) leader and chairperson of Parliament's standing committee on Appropriations, Dr. Mmusi Maimane, said the GNU is fast becoming a patronage network.
'It is not working for the people but serving politicians. Compounding the issue is a bloated executive, VIP protection, a R3 billion expenditure meaning the priority is not on education or economic growth.
"We will as BOSA and the appropriations committee continue to fight against such excesses and will be ensuring National treasury accounts for such items,' promised Maimane.
BOSA has proposed a drastic reduction in the size of the bloated Cabinet, capping of ministerial perks and a significant cut to wasteful VIP expenditure as well as merging or eliminating underperforming departments that have failed to deliver value to the public.
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