Fuel levies taxman’s unlimited cash cow

Winston Churchill once famously said: “For a nation to try to tax itself into prosperity is like a man standing in a bucket and trying to lift himself up by the handle.”

Our government is quite obviously oblivious to those wise words. A story in The Citizen last week pointed out the ludicrous increases to our fuel levies over the last decade.

In the 2008/09 financial year the revenue from the fuel levies totalled at R24.48 billion and it more than trebled to R75.37 billion ten years later,

whereas the total amount of tax generated only doubled over this period.

Ten years ago R1.77 out of every litre of fuel bought went to the taxman in various forms and it has risen to a staggering R5.73 a decade later. And like the famous advertising slogan goes: but there’s more.

The Organisation Undoing Tax Abuse (Outa) has proposed 20 cents get added to the fuel price per litre to raise the debt of e-tolls over the next 20 years to replace the current stillborn system.

And research by a transport economist has alarmingly indicated that the country’s road maintenance backlog has more than doubled to R416.6 billion from R197bn in 2013. Two options to clear the backlog are to raise VAT by four percent to 19% or add three rand to the fuel levy. That is a scary thought. If this increase and Outa’s proposed one get signed off we are looking at the fuel levies going up to around R9 per litre, a number so bloated that you could be paying less than half the price for a litre of actual fuel.

And it’s not a mere case of every motorist coughing up a few dozen more rand every time he or she visits the pump. The bloated price will have a massive impact on the economy as a whole with the people living below the breadline the hardest hit.

It’s in fact a farce that our neighbouring countries sell fuel at a significantly cheaper price than us – except for Zimbabwe of course – for something they mostly get from here. And you would be inclined to think that places like Botswana and Lesotho are the ones who would be more desperate for taxes than us.

But it’s not the fuel alone our greedy taxman is targeting. Apart from increases to the fuel levies which includes emissions tax, we have seen sugar tax being implemented with entertainment tax possible on it’s way.

We are clearly hell-bent on lifting that bucket from the inside.