South African motorists could face new tax

The South African government will soon require an additional tax for South African motorists in the form of a traffic-management levy if a draft policy paper from the Department of Transport goes through unchallenged.

The department released the White Paper last week as an overarching policy document for South Africa's national transport network and traffic management regime. The White Paper also discusses transport infrastructure and intergovernmental coordination of traffic management and law enforcement.

The news of an additional tax is not likely to be met with open arms from motorists, who are already grappling with rising fuel prices, with even steeper increases expected in the coming months.

Motorists have resisted other forms of additional tax from the government in Gauteng, for example the controversial electronic tolling system to pay for the province's Gauteng Freeway Improvement Project. Cabinet is expected to decide on the fate of the system soon.

The White Paper said the government needed to introduce a "balanced funding policy" on road traffic complete with re-evaluated spending priorities and increased spending on road quality and traffic management.

"Existing funding, budgeting and prioritising procedures will be adapted to ensure an increased availability of funds for traffic management purposes. Reliable procedures for determining the minimum and optimum requirements in respect of road-traffic management resources will be developed and applied," the White Paper stated.

The draft policy document said traffic management required innovative funding strategies and that these were still being investigated.

"This will include the allocation of a percentage of the roads budget for traffic control purposes. The introduction of a traffic-management levy to vehicle licence fees and fuel sales will be investigated.

Fines

"Fine-collection procedures relating to traffic offences, penalties for non-payment, confiscation of movable property and demerit systems will be improved and fully implemented."

According to the White Paper, the government will explore the desirability of apportioning traffic fines to road-traffic management funds instead of fines accruing to individual authorities. It said government was also considering the general state of provincial revenue funds.

Organisation Undoing Tax Abuse (OUTA) CEO Wayne Duvenage said South Africa was over-taxed; yet, the country's road network was still collapsing because, in his view, the government was spending inefficiently.

"If we just spent the current taxes and funds allocated to various national, provincial and local government authorities in a wise and prudent manner, with greater transparency and strong oversight mechanisms in place, we would not have the need to find creative ways to introduce new taxes," said Duvenage.

Duvenage called the proposed policy "double taxation", adding that higher taxes reduce South Africa's competitiveness.

"The Department of Transport is already one of those that has increased various levies and charges applied through their various mechanisms significantly over time, be it through the Road Traffic Management Corporation, Road Traffic Infringement Agency, Driver's Licence Card Account, and so on.

"In each of these entities, we see massive revenue increases over time, and outrageous salaries paid to their executives, who in turn build their empires of spending and pay themselves massive bonuses," Duvenage said.

He said everything contained in the White Paper must be delivered using the current revenues collected by Treasury and the various revenue mechanisms that are already in place. -Fin24