The Automotive Focus Group (AFG) invited Graeme Sheard from KPMG to address the group at the latest meeting last week, held in the Holiday Inn.
The buzz words for KPMG are “cutting through complexity”, and corporate taxation is certainly complex, though Graeme Sheard did manage to show where the tunnel was, and the faint flicker of light at the end of it.
With KPMG being a very large conglomerate, they have been able to carry out annual surveys and then extrapolate the results into trends. For the automotive industry, the prediction is that it will be quite different by the next decade with mobility solutions to counter traffic problems – perhaps you will not need to ‘own’ a car, but just pick up and drop off in the cities. There will be specific vehicles for specific environments – the advent of ‘city cars’ is here already, but will increase. ‘Green’ vehicles will increase – electric, hybrid and fuel cell. All these will bring about major changes in the supply chain, and bring in new industry participants, particularly in the battery/electric motors area.
Graeme Sheard, KPMG.
Graeme, with his crystal ball, also predicted that as the customs revenue falls with Free Trade Agreements (FTA’s), there will be other taxes applied to counteract the government shortfall. The most obvious one is VAT, and predictions of an increase from 7 to 10 percent were made.
He made mention of some other FTA’s which are currently being hammered out, including India, the European Union, ASEAN and Peru. Graeme Sheard did ask if any of the AFG members were trading with Peru, but at this stage the answer was in the negative!
The veritable minefield in the regulations of working within an FTA were shown, with advice being given to ensure there is an indemnification clause in any agreements, as penalties can be very high.
He also suggested that for some members of the AFG, the penalties of importing under an FTA can be such that it may even be better just to import at the domestic rate of tax.
Altogether, this was one of the better addresses that the AFG has provided for its members.
James Beeson, the president of the AFG mentioned that there has been a change in direction, as regarding speakers. The AFG committee has determined that if they have the subject matter or topic, then it is easier to identify and find appropriate speakers to talk, rather than find the speaker and then find a topic. It is also expected that this method should also expand the network of the AFG, as it will be necessary to find some speakers outside of their current network.
Those who are interested in contacting the AFG can do so through [email protected]