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Gordhan goes after soft targets – not serious on corruption

OUTA has noted with keen interest the budget presentation made by Finance Minister, Pravin Gordhan on Wednesday, where he outlined amendments and focus areas of tax generation and expenditure over the next financial year. The speech was motivating in many respects but devoid of tackling the scourge of corruption, which impacts negatively in many areas, and undermines the development of the country.

While Gordhan’s decision to increase fuel levy by 30 cents a litre was predictable during this time of low fuel prices, we are concerned these high fuel levies (now at 36% of the fuel price), will give rise to over R110 billion in the general fuel levies (fuel levy and RAF), which is over 200% up on this revenue stream of a decade ago. The taxes applied to motorists and the transport industry will unfortunately be passed on to all citizens and will push up the cost of living.

Despite increasing the fuel levy, e-tolls remain a double taxation on Gauteng motorists and have become a farce and waste of taxpayers’ money. It seems strange the government claims it cannot place an additional 9 cents on the fuel levy to cover e-tolls as this will affect the poor, yet it has no problem increasing the general fuel levy by 60 cents over the past two years.

The Presidential Committee report on State Owned Entities was released in 2013 and sadly it’s recommendations are only now being taken seriously. The 21st recommendation in this report, makes a strong suggestion that e-tolls was a poor decision and we trust the Minister will call SANRAL and the Department of Transport to see reason and apply rational thinking in halting the failed e-toll decision.

OUTA is fully aware of government’s predicament and how it desperately needs to increase the revenue base, however, we believe that Government’s relative reluctance and inability to seriously address the high levels of squandering, wasteful expenditure and corrupt abuse of taxes generated, has left Treasury and our country in our current lethargic state.

In order to be serious and to demonstrate respect for its taxpaying citizens, Government must work harder to get its house in order and show meaningful action to plug the holes in the bucket and deal with corruption. We did not get a sense that this is being handled with conviction.

We need the removal of those officials who have been responsible for the waste, and criminal charges laid where necessary, so that a clear message is sent to those who waste and steal our taxes. They must fear the potential consequences and thereby change behaviour. In addition, we would like to see Government claw back on the known lost revenues from people and organisations who have been fraudulently enriched with taxpayers’ money.

We want Minister Gordhan to instruct government entities to fully grant access to people who are rightfully inquiring about information pertaining to expenditure and tender allocation and if that information is not all there, the CEO’s job should be on the line.

OUTA also believes that this budget is not enough to entice and stimulate investment into our economy. Increasing the capital gains tax alongside all the other increases simply drives away investment. Government should start undoing the superficial taxes which add no value and realise that we cannot tax ourselves into prosperity, but should rather be introducing significant changes to our regulatory and tax environment to meaningfully stimulate investment into South Africa.

OUTA will be studying the division of revenue bill, and we will encourage the public to comment on the allocations that might be undesirable.

Gordhan increases the fuel levy again

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