Government considering new tax on motorists to fund ‘traffic management’

  • A draft transport white paper proposed a tax on vehicle registration fees and fuel sales to fund national and provincial traffic management.
  • The White Paper also proposes procedures for recovering fines, including forfeiture of movable property and a demerit system.
  • The organization Undoing Tax Abuse said the results of the white paper proposal were positive but should not be achieved by additional taxes.

The government will soon demand an additional levy for South African motorists in the form of a traffic management levy if a draft guidance document from the Department of Transport passes unchallenged.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 deals with transport infrastructure and intergovernmental coordination of traffic management and law enforcement.

News of an additional tax is unlikely to be welcomed with open arms by motorists, who are already grappling with rising fuel prices, with even bigger increases expected in the coming months.

Motorists have resisted other forms of additional levies from the Gauteng government, for example the controversial electronic toll system to pay for the Gauteng Highway Improvement Project in the province. The Cabinet is expected to decide the fate of the system soon.

READ | Electronic toll decision imminent, says Mbalula

The White Paper said the government should introduce a “balanced funding policy” on road traffic, with reassessed spending priorities and increased spending on road quality and traffic management.

“Existing procedures for financing, budgeting and prioritization will be adapted to ensure increased availability of funds for traffic management purposes. Reliable procedures for determining minimum and optimal requirements for road traffic management resources will be developed and enforced,” the White Paper said.

The draft policy document indicated that traffic management required innovative financing strategies and that these were still under consideration.

“This will include allocating a percentage of the roads budget for traffic control purposes. The introduction of a traffic management levy on vehicle registration fees and fuel sales will be explored. .

“Procedures for collecting traffic fines, 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 consider whether to allocate traffic fines to road traffic management funds instead of fines accruing to individual authorities. He said the government was also reviewing the overall state of provincial revenue funds.

READ | Mbalula and Auditor General at odds over delay in RAF audit report

Undoing Tax Abuse Organization (OUTA) CEO Wayne Duvenage says South Africa is overtaxed; yet the country’s road network continued to crumble because, he said, the government was spending inefficiently.

“If we just spent the current taxes and funds allocated to the various national, provincial and local government authorities in a wise and prudent way, with greater transparency and strong oversight mechanisms in place, we wouldn’t need to find creative ways to introduce new taxes,” Duvenage said.

Duvenage called the proposed policy “double taxation”, adding that higher taxes reduce South Africa’s competitiveness.

“The Department of Transportation is already one of those who have significantly increased various levies and charges applied through their various mechanisms over time, whether through the Road Traffic Management Corporation, the ‘Traffic Violations Agency, Driver’s License Card Account, etc.

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

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

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