Transport minister wrong about e-toll fuel levy?
Union Solidarity says that Transport Minister Dipuo Peters’ claim that the fuel levy would have to be increased to R3.65 to cover infrastructure costs – were it to be used as an alternative to e-tolls – is nothing more than scare tactics.
In her presentation to the e-toll advisory panel on Tuesday (4 November), Peters dismissed the much-touted fuel levy alternative to the infrastructure problem in the country, saying the fee would have to be increased to R3.65 to cover Sanral’s debts.
This would be unfair to the rest of the country, the minister said.
According to Solidarity, however, the minister is either withholding information from the public, or simply employing scare tactics to distort the issue.
“The average fuel levy is currently R2.17 per litre, which means an increase of R1.48 is needed to arrive at the minister’s R3.65,” Solidarity said.
“An additional levy of R1.48 per litre will be able to cover the cost of Gauteng’s toll roads within less than a year, while infrastructure is typically paid off over a much longer period.”
Paul Joubert, senior economic researcher at the Solidarity Research Institute (SRI), said the tax statistics which were recently released by the South African Revenue Service show that, at the moment, tax is levied on approximately 22 billion litres of fuel annually.
“This means that an additional levy of R1,48 per litre of fuel will bring in at least R32 billion in additional tax income annually.”
“Since the minister has estimated the cost of the overall backlog in road maintenance work in South Africa to be R197 billion, such a levy would not only cover the cost of Gauteng’s roads, but also settle the entire country’s backlog within just six years in cash,” he said.
“It is doubtful that sufficient construction capacity even exists in South Africa to finish the work faster than the money will be collected through such a levy.”
The union noted that an increase of 12 cents to the fuel levy would be sufficient to pay off debt incurred for the roads, with interest, within ten years. This could easily cover R20 billion in costs, which is the most often reported figure, Solidarity said.
“By claiming that a drastic increase in the fuel levy will be needed as an alternative for the e-tolling system, the minister is merely employing scare tactics, unless there are figures the minister is withholding from the public,” said Joubert.
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