Wednesday, January 26

Cracks Appear in the Government’s Electronic Toll User Payment Principle

The government and some state entities appear to be cornering the user payment principle, which the government continually uses to justify electronic tolls in the Gauteng Highway Improvement Project (GFIP).

Finance Minister Enoch Godongwana reportedly warned earlier this month against canceling toll debt in a presentation delivered at an ANC meeting and seen by the financial services media company. Bloomberg.


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Read: Godongwana backs off from ANC wave of R73.5bn

He said Godongwana told the meeting that the government will, among other things, need R4.6 billion to forgive unpaid tolls for the roads in central Gauteng, adding that this “request has serious long-term consequences if it is rejected. the principle of user payment ”.

SABC’s ‘Tip’

Meanwhile, the South African Broadcasting Corporation (SABC) in a presentation to public hearings by the Department of Communications last week repeated its suggestion of a household tax to help recover and stabilize its finances.

In terms of this proposal, the household tax will be based on the possibility of accessing SABC’s services, rather than on the actual use of its services.

Read: SABC wants a ‘domestic tax’ to finance public broadcasting

Wayne Duvenage, executive director of the organization Undoing Tax Abuse (Outa), said that the SABC’s suggested household tax “sends mixed messages about the user payment principle and sends a message from a very confusing government that is grasping to straws where he can. ”

Duvenage said that only the local government will be able to administer a household tax, but the SABC is a problem for the national government.

“So the whole idea of ​​collecting taxes on households is not new, it is a sham and it is not going to happen,” he said.

Principle in perspective

Duvenage added that the user payment principle is internationally accepted, but only if it can be managed.

When user payments cannot be managed, governments have to find other mechanisms, he said.

Duvenage said paying users for electricity is easy, with users cut off if they don’t pay, but if SABC’s electronic tolls and television license fees can’t be managed “they’re dead in the water.”

“It’s not about principle, it’s about enforceability and enforceability,” he said.

Automobile Association (AA) spokesperson Layton Beard said that the user payment principle does not apply to Gautrain, although people are paying fares to use the express train system because Gautrain users are subsidized through of the guarantee of sponsorship to the Bombela Concession Company (BCC), the operator of the Gautrain, but road users are not subsidized.

The Gautrain sponsorship guarantee is a subsidy to the BCC when its total income from Gautrain users is below a contractually agreed amount.

According to the latest annual report from the Gautrain Management Agency (GMA), the GMA’s sponsorship guarantee payment increased to R 1,971 million in the year to the end of March 2020 from R 1,667 million in last year.

Taxes …

Beard said it is not appropriate to simply look at electronic toll payment in GFIP and “just say yes or no” because there is a link between the taxes people pay and the money that has already been used to subsidize the Gautrain.

He said several finance ministers have had very strong views on the GFIP and electronic tolling, but they need to consider what consumers are already paying when using their private vehicles on the roads.

“They are paying to have those vehicles on the road in the form of license disc fees, they are paying to have those vehicles on the road in terms of the taxes on the fuel they use, they are paying to have those vehicles on the road through the taxes they pay through the tax on the rent.

“They are already being taxed in three ways. Now they have to pay more because their taxes are used to pay a private dealer and the GFIP itself is completely onerous for them.

“That is why they have decided not to pay and the compliance rate for electronic tolls is so low,” he said.

Read: 5.8% of the population pays about 92% of all personal taxes

Transport Minister Fikile Mbalula has said on several occasions over the past 18 months that a final decision on the future of electronic tolls in the GFIP is imminent, but a decision has yet to be announced.

President Cyril Ramaphosa in 2019 appointed Mbalula to head a task force to report on the options available for the future of electronic tolls by August 2019.

Mbalula said during his budget voting speech in May this year that he had presented nine possible solutions to the impasse of electronic tolls and confirmed that the first of these options was “to eliminate electronic tolls.”

Divergent views, even within the ruling party

Beard said AA has a great deal of difficulty reconciling different views on electronic tolls because there are many divergent opinions on it, even within government.

This is a reference to Gauteng transport MEC Jacob Mamabolo stating during a radio interview in May 2021 that electronic tolls are “being phased out” and the ANC in Gauteng on several occasions stating that electronic tolls in the GFIP should be phased out.

Beard said AA believes that the current electronic toll model is not sustainable, does not work, and that an alternative solution needs to be found.

Read: Deputy Minister of Transportation accused of not being aware of the reality on the issue of electronic tolls

Duvenage said Godongwana’s comments, and specifically his reference to the 4.6 billion rand in outstanding electronic toll debt, “indicate a slightly different approach to electronic tolls if you read between the lines.”

“I think they [government and National Treasury] are recognizing that the [GFIP] The bonds and the interest on that bond will have to be collected by the state and they will try to get some of the electronic toll money pending from users.

But Duvenage said the reality is that there is no way the South African National Highway Agency (Sanral) can enforce non-payment of electronic tolls because it has stopped citing motorists for non-payment, warrants of execution are not being broadcast and motorists. they are not blacklisted and their licenses are not withheld for non-payment.

He added that it will be a sham and the public will “see it” if a decision is made on the future of electronic tolls on the eve of the November 1 local government elections, especially if the ANC claims it as “their victory” because they asked the elimination of electronic tolls.

The South African Trade Union Congress (Cosatu) in Gauteng warned in August that there will be serious consequences for the ANC in Gauteng if Mbalula does not make “an announcement favorable to our demands by the end of September.”

He said that the electronic toll policy has failed and that motorists do not pay even when Sanral offers them discounts.

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