The truth about South Africa's fuel levy
Tax statistics compiled by the South African Revenue Service and the national budget indicate that the amount of money collected from South Africa’s fuel levy is quite different from the figures touted by the Opposition to Urban Tolling Alliance (Outa) and the Democratic Alliance (DA).
The National Treasury’s 2013 budget review lists fuel levies collected from 1995/96 to 2011/12. Taken from the 1998/99 financial year to 2012/13 the total amount collected comes to just under R340-billion, far more than the DA’s claimed R180-billion and R240-billion.
When calculated for the last six financial years – from 2007/08 to 2012/13 – fuel levies amount to R188.8-billion. That is around R50-billion less than the amount cited by Outa – a pressure group campaigning against controversial electronic tolls implemented in Gauteng province.
Outa and the DA argue that road construction and maintenance could be adequately funded using the existing national fuel levy system and that there is no need for e-tolls.
Out by huge margins
The numbers bandied about by Outa and the DA were out by huge margins.
A recent post on Outa’s Facebook and Twitter accounts asked: “Two hundred and thirty eight billion [rand] in six years. Where has it all gone? Remind me again why we have e-tolls?” And it exhorted readers to “[s]hare this if you agree we need a forensic audit of the fuel levy fund”.
The DA took up the charge on Monday with a press release jointly issued by its parliamentary leader, Mmusi Maimane, and MP Manny de Freitas.
“Currently the National Roads Act of 1971 allows the government to collect a fuel levy from every litre of fuel sold, and to add that to the national fiscus and spend it on any budget item,” they stated. “Over R240-billion has been collected through this levy since 1998.”
A version of the press release given to journalists at a DA press conference stated that over “R180-billion has been collected through this levy since 1998”.
Maimane and De Freitas went on to argue that “the fuel levy ought to be directed solely to road construction and maintenance, which will further negate the need for e-tolls”.
What is the fuel levy?
The fuel levy is an annually adjusted tax that is largely intended to fund government’s general expenditure programmes. About a third of the money is also shared with metropolitan municipalities.
For the 2014/15 financial year, the levy amounts to 224.5 cents per litre of petrol sold and 209.5 cents per litre of diesel.
Thorough research required
So where did Outa and the DA get their numbers?
De Freitas who claimed that the R240-billion figure originated from studies done by the Automobile Association (AA) and the Southern African Bitumen Association. But neither the AA study, which was conducted in 2008, nor the 2006 one carried out by the Southern African Bitumen Association list fuel levy amounts.
Outa chairperson Wayne Duvenage said the fuel levy figure their association used had been calculated by multiplying the total litres of fuel sold in a given year – gleaned from annual reports of the South African Petroleum Industry Association (Sapia) – with the fuel levy tax rate. But this method is wrong as Sapia provide totals for a calendar year, whereas the fuel levy changes at the beginning of government’s financial year each April.
“We had not updated our research until Friday and I guess this amount may have been based on conservative assumptions or different time periods,” Duvenage said, conceding that Outa should “do more thorough research before we repost information of this nature”. – Africa Check
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