Budget going after soft targets: Outa

IOL mot pic feb25 Fuel Pump Nozzle 1 . Government cant add nine cents a litre to cover the cost of e-tolls but has no problem hiking the fuel levy by 30 cents. File photo: Reuters

Johannesburg - The Organisation Undoing Tax Abuse (Outa) has accused finance minister Pravin Gordhan of going after soft targets in his budget presentation, while failing to tackle the big issues.

Outa chairman Wayne Duvenage said the government's decision to increase the fuel levy by 30 cents a litre was predictable during this time of low oil prices - but pointed out that the high fuel levies (now at 36 percent of the fuel price if you count both the general fuel levy and the RAF levy) will cost motorists and the transport industry more than R110 billion over the next year - increase of more than 200 percent over the past decade (see graphic at the bottom of the story).

And that cost will inevitably be passed on to consumers, pushing up the cost of living.

E-tolls ‘overpriced by more than 300%’

Duvehage said the Presidential Committee on State-owned Entities - released in 2013 - was sadly only now being taken seriously. The 21st recommendation of that report made a strong suggestion that e-tolling was a poor decision yet, despite a hefty increase in the fuel levy, e-tolls remained a double taxation on Gauteng motorists, and had become a farce and a waste of taxpayer's money.

“It seems strange,” he said, “that government claims it can't put an extra nine cents a litre on the price of fuel to cover the cost of the Gauteng Freeway Improvement Project but has no problem hiking the genral fuel levy by 60 cents over the past two years.”

He urged the minister to call on Sanral and the department of transport to apply rational thinking and halt the failed e-toll campaign.


The organisation was fully aware, he added, of the desperate need to increase the revenue base, but it believed that government's inability to address the high levels of corruption and corrupt abuse of taxes generated, was largely responsible for the current plight of the treasury.

Government would have to work harder to be serious - and show respect for its taxpaying citizens - to get its house in order and deal with corruption.

Those officials responsible for the waste must be removed, he insisted, and criminal charges laid where necessary, to send a clear message to those who waste and steal our taxes - because the only way to change their behaviour was to make them fear the consequences.


Government should also go after the people and organisations who have been fraudulently enriched at the taxpayers' expense and get hat money back. In addition, the minister must instruct government entities to grant full access to people rightfully enquiring about expenditure and tender allocations - and if that information wasn't there, the CEO's job should be on the line.

This budget, said Duvenage, wasn't enough to stimulate investment in our economy; increasing capital gains tax, on top of all the other increases, would simply drive away investment.

Government must realise that we cannot tax ourselves into property; superficial taxes that add no value must be undone and significant changes introduced to our regulatory and tax environment that will meaningfully stimulate investment in South Africa.

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