The Organisation Undoing Tax Abuse (Outa) says it is worried that the Minister of Finance Enoch Godongwana may use the sizeable petrol price cuts expected in September as an excuse to raise the fuel levy to pay for e-tolls.<\/p>\n
Outa chief executive Wayne Duvenage said that the group is concerned the government will raise the fuel levy by 25 to 30 cents per litre to cover the Gauteng freeway improvement bonds that the e-tolling system has failed to do.<\/p>\n
\u201cRecently, Minister of Transport Fikile Mbalula indicated that an announcement on the e-toll decision is expected to coincide with the Minister of Finance\u2019s medium-term budget policy statement, due in October,\u201d said Duvenage.<\/p>\n
There have been strong hints that the Minister of Finance will increase the fuel levy to offset the scrapping of e-tolls, he said.<\/p>\n
“If this were to happen, Outa would denounce this decision on the basis that the fuel levy has already been increased in excess of R2.50\/l since the Gauteng freeway upgrade began in 2008.”<\/p>\n
The government failed to take up Outa\u2019s suggestion of a ring-fenced 10c\/l increase to the fuel levy some eleven years ago which would have settled the freeway bonds by today, said Duvenage.<\/p>\n
By increasing the fuel levy by 25c\/l, an additional R5.5 billion would flow into Treasury\u2019s coffers each year.<\/p>\n
“Our government has made extremely poor decisions in the past, not only on the various fuel levies and taxes but also the road financing options available to it,” he said. “Short-term financial gains lead to long-term negative ramifications for taxpayers.”<\/p>\n
Duvenage added that it would not be the first time that the government has made desperate financing decisions based on short-term external factors, only to see the negative ramifications play out in the long term.<\/p>\n
When the petrol price dropped from slightly over R14\/l in mid-2014 to R10.31\/l some eight months later in February 2015, the then Minister of Finance Nhlanhla Nene decided to introduce massive increases to both the general fuel levy and the Road Accident Fund levy of 30c\/l (14%) and 50c\/l (48%) respectively.<\/p>\n
“This decision alone added roughly R17 billion to Treasury\u2019s coffers each year, and permanently adding 80c\/l to the price of fuel,” said Duvenage – a price motorists still pay today.<\/p>\n