Wednesday, January 26

Outa keeps ‘champagne on ice’ for final electronic toll decision

The Undoing Tax Abuse Organization (Outa) says it will keep “the champagne on ice” until there is a final decision on scrapping electronic tolls in the Gauteng Highway Improvement Project (GFIP), and emphasizes that the decision of Eliminating electronic tolls is not final until enacted.

The Automobile Association (AA), which has been constantly calling for the elimination of electronic tolls since its introduction, has also been cautious in its reaction to comments from Transport Minister Fikile Mbalula on the elimination of electronic tolls in the GFIP.

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Outa Chief Executive Wayne Duvenage said Monday that the organization has taken note of the article published by Moneyweb, which states that the cabinet has made the decision to eliminate electronic tolls.

Read: The government will finally eliminate electronic tolls at GFIP

“While at first glance this is a welcome and long overdue decision, the decision to reverse the toll declaration for Gauteng’s highways requires formal enactment into law.

“Until this happens, this statement should be taken as rhetoric,” he emphasized.

AA also awaits confirmation

AA spokesman Layton Beard said the association will also await the official announcement on the decision to eliminate electronic tolls.

“The decision to discard [e-tolls] it is not final until the cabinet has made a final decision.

“We are waiting, like everyone else, for the announcement in the budget speech of the official word or something from the cabinet or something previous official that says this is the way to go.

“We welcome the fact that we can see a scrapping of the system because it is something that we obviously wanted but, like everyone else, we will wait for the official announcement to come,” he said.

The unofficial announcement

This follows the Moneyweb report on Monday that Mbalula said during a briefing on Friday that the cabinet had made the decision to eliminate electronic tolls, but when this decision was supposed to be implemented, “the Treasury said ‘no, wait'” .

Mbalula added that the nine options for the future of electronic tolls that were presented to the cabinet in 2019 had been reduced.

“We are looking at scrapping and the implications. That is the option we are looking at, ”he said.

Mbalula said that Finance Minister Enoch Godongwana will make an announcement on electronic tolls at the latest in his budget speech (in February).

‘Cheapest option’

Outa said that eliminating the electronic toll scheme is the cheapest option, because none of the current electronic toll funds are being allocated to the GFIP bonds and there are no penalties if the scheme is canceled.

The organization said the state has already been financing the GFIP bonds through National Treasury tax appropriations, which was the proposal made by Outa since the beginning of the highway improvement.

In addition, Outa said that the Treasury has already raised the fuel tax well above Outa’s suggested amount of 10 cents per liter of gasoline since 2008, which means that the funds already exist within the treasury to make appropriations. to the South African National Highway Agency (Sanral) to pay. for GFIP bonds “as it has been doing for the last six years”.

Duvenage said Outa is urging the state to speak less and make its decision final by reversing the declaration of the Gauteng highways as toll roads.

“Until then, the public cannot consider that the electronic toll scheme has been phased out.

“For now, we will keep the champagne on ice,” he said.

Compliance with payments

Beard said AA maintains its position that drivers who continued to pay their electronic tolls should be reimbursed.

The payment compliance rate was less than 19% in 2019 when President Cyril Ramaphosa appointed Mbalula to head a task force, which included then-Finance Minister Tito Mboweni and Gauteng Prime Minister David Makhura to inform before August 2019 about the options available for future e-tolls.

“If the fuel tax is being considered as a possible solution, our opinion is that ‘let’s not increase the fuel tax, but let’s take a part of the fuel tax and use it for electronic tolls,'” he said.

Mbalula said on Friday that the government is considering how scrapping electronic tolls will affect future financing of road infrastructure and is considering different models to finance this infrastructure in the future. He admitted that the fuel tax has been on the agenda.

He said that both Outa and the Cosatu union federation have been in favor of using the fuel tax to finance the payment of GFIP bonds, but the National Treasury ruled it out because it will not be sustainable.

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