4 major tax blows South African motorists can expect over the next few months
South African motorists can expect at least one new tax and three additional hikes to existing taxes between March and June.
On top of a hike in fuel taxes from 1 April, and the addition of the carbon tax to fuel prices in June, local drivers will also have to contend with higher toll fees from March, the Automobile Association said.
This will be exacerbated by National Treasury’s decision to not move the country’s tax brackets in line with inflation – meaning taxpayers will effectively end up paying more tax, leaving less in the pocket to deal with all the price increases.
These are the big tax blows to look out for:
- From March 2019, all toll fees, including e-tolls, will be increasing;
- From April 2019, the General Fuel Levy will increase by 5 cents per litre, and the Road Accident Fund Levy will increase by 15 cents per litre;
- From June 2019, the Carbon Tax will be introduced, adding 9 cents per litre to the petrol price and 10 cents per litre for diesel;
- In the 2019 tax year, tax brackets will not be adjusted, effectively presenting as a ‘hidden tax’.
“While the tolls are increasing in line with inflation, this will be of little solace to consumers who have either not received increases to their wages and salaries or whose increases have either been in line with or lower than that,” the AA said.
“It may be convenient to keep increases in line with inflation from a messaging perspective, but the reality is that multiple increases to taxes, levies and tolls will have a cumulative effect.”
According to the AA, the increase in toll fees, which include the controversial e-toll system in Gauteng, will do little to encourage buy-in from the province’s disgruntled motorists.
“Consumers who are already struggling to make ends meet in our fragile economy will be even more hard-pressed now with the result that many may be forced to make decisions on whether to continue paying for e-tolls,” it said.
“Sanral may not like the outcome of these decisions. This is especially important given its admission in Parliament in 2017 that the compliance rate for e-toll users on GFIP is only around 30%.”
As an example – using toll fees excluding caps and exclusions – the cost of a day trip on the Gauteng freeway from Soweto to Pretoria will cost consumer an additional 4.35% in tolls from March 2019 compared to March 2018.
This represents a R43.22 increase from R826.80 to R864.40. Since 2015 this has increased by R165.40, it said.
The AA said that the increasing costs associated with road travel in South Africa will make everything more expensive, and will have a direct and indirect impact on consumers.
“It also makes it harder for job seekers to find work as few of them have the resources to pay current transport costs, let alone increased fees. This, in particular, is worrying given the country’s high unemployment rate.”
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