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Scrap e-tolls, review fuel levies to ease consumer burden, pleads OUTA

Jul 13 2018 15:58
Lameez Omarjee

Scrapping e-tolls is the first step in bringing much-needed relief to SA consumers’ pockets, said the Organisation Undoing Tax Abuse (OUTA).

The organisation on Friday submitted to ministers of the economic cluster its practical suggestions to ease the burden on consumers.

This follows President Cyril Ramaphosa’s mandate to the ministers last week to find measures to cushion the effects of the high fuel price hikes and the VAT increase on consumers. 

In its submission, OUTA highlighted that consumers had to contend with rising electricity prices, increasing taxes on personal income and increasing municipal rates, in addition to the VAT and fuel price hikes.  

OUTA said 45 civil activists worked together to put forward recommendations to government.

"The purpose of this document is not to attack the government for the actions of the past, but rather to provide pro-active recommendations on areas where costs can be critically reviewed to alleviate the current economic burden on citizens," the submission read.  

Scrapping e-tolls was the top priority on the list. "The public neither asked for nor deserved this burden. OUTA urges the president to scrap this system immediately," the report read.

Added legal action by the South African National Roads Agency (Sanral) against those defaulting on e-toll payments is contributing to rising costs.

"The e-toll system is currently costing the country millions. It will therefore be to the advantage of motorists and the government if the regulation declaring the Gauteng Freeways as toll roads, is revoked," OUTA said.

Other recommendations include having VAT on toll fees removed and introduce discounts for local users of toll roads.

OUTA also called for a general decrease in the fuel levy, which it said had risen by 165% over 10 years.

"A general indirect tax like the fuel levy should not be used as a substitution for poor tax collections. Neither should it be introduced to the detriment of the poor. 

"Government have demonstrated a lack of understanding and have an uncompassionate attitude towards this ‘easy tax’ by continuously using it to place unnecessary burdens on the public and using it as a quick revenue collection mechanism," OUTA said.

The organisation pointed out that countries in the Southern African Development Community such as Angola, Botswana, Namibia, Mozambique and Lesotho charge less for fuel than South Africa.

Further, various rebates on fuel purchases by state departments and SOEs must be ended. "Organisations such as Eskom receive these rebates, as well as state departments such as the Presidency," OUTA said.

In addition, OUTA recommended that the Road Accident Fund (RAF) levy be reassessed, given the "corruption and abuse" at the institution.

"It is unacceptable that the South African public must carry the burden of corruption and incompetence any longer," the organisation said.

The RAF levy increased by 330% in the past 10 years, OUTA noted.

Government should also look into the development and use of railways to reduce the load on roads. This will keep roads in a better condition and possibly reduce motor vehicle fatalities.

In the same breath, OUTA called for government to clean up corruption in rail companies Transnet and the Passenger Rail Agency of South Africa (Prasa).

Government spending

OUTA made recommendations with respect to government spending. This would involve reconfiguring a bloated Cabinet and addressing issues such as the amount of money spent on employees who are suspended with pay, they said.

Further, there should be a culture of cost-cutting when it comes to vehicle and travel benefits for MPs and Cabinet.

"Government must remember that they are the curators of public money, coming from both rich and poor, and they have a responsibility to their people to be responsible with that money. 

"This includes trimming the budget for travel and vehicles, as well as housing," the statement read.

Finally, OUTA recommended an independent forensic investigation be launched into the Department of Water and Sanitation, given challenges of leadership instability, human resources and financial viability, among other things.

The organisation cited a report by the Auditor-General of South Africa, with enough evidence to warrant an investigation over mismanagement at the department.

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outa  |  cyril ramaphosa  |  e-tolls  |  consumers  |  sa economy
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