OWN CORRESPONDENT, Johannesburg| Wednesday 4.00pm.
THE Katz Commission of Inquiry into tax structures on Wednesday proposed that a provincial surcharge on the national fuel levy be added to boost the revenue of provinces.
In a report released on Wednesday, the commission said such a levy could be raised with relative ease at a lower-tier level, provided that retail outlets have pumps with sealed meters which can be monitored.
If the total fuel levy is assigned to provinces, their combined income will rise by about R14-billion a year, the report said. The commission noted several potential drawbacks in a provincial fuel levy, including questions on whether the system will meet the government’s requirement of enhanced accountability levels in provincial government.
A further possible practical problem would be motorists bypassing high-levy provinces, which could lead to distortions in provincial incomes. The commission came out against the idea of a provincial surcharge on personal income tax, saying it would contravene sections of the Constitution. It also raised serious doubts about the capacity of the South African Revenue Service to administer such a system.