Online fees for vehicle licensing introduces massive hidden tax hikes

Online transactions should be cheaper, not a hidden way for the state to raise revenue

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18/02/2022 08:01:12

Online fees for vehicle licensing introduces massive hidden tax hikes

OUTA believes that the Road Traffic Management Corporation’s (RTMC) introduction of an online vehicle and driver’s licencing system is a welcome move into the digital age, however we cannot accept the massive increases in the cost slapped onto these services.

“Moving into the digital age and providing services through online portals is supposed to reduce the costs to customers, not increase them,” says Andrea van Heerden, OUTA Senior Legal Project Manager. “It’s all very well to say that you can now have your vehicle change of ownership done from the comfort of your home, but the cost of doing so has moved from around R150 to R530, plus another R99 courier fee, which is nothing but a rip-off and an unacceptable money-making scheme.”

Imagine the outrage if the banking industry told its customers that transacting online will cost them 300% more than the charges applied if they came into the bank for their services. This behaviour would generate customer outrage, as the efficiencies recovered by moving into a digital space would not be passed on to the customer. The question we have for the Minister of Transport is: “Why are you allowing the RTMC to introduce massive service fees which are essentially new ‘additional taxes’ to society, and passing these off as ‘convenience fees’?”

We see this abuse of power creeping into many government departments, where services that society once received free or at minimal cost are now being turned into profit centres. This is specifically the case with the RTMC, the Road Traffic Infringement Agency (RTIA), the Driving Licence Card Account (DCLA) and more.  When these entities start to generate excessive revenue streams, they find ways to spend this money. While he was the CEO of RTIA, Japh Chuwe was allowed to increase his salary from an already high R3.3 million a year to R10.8 million in one year. With massive increases in new revenue streams accruing to these state-owned entities, they find creative ways to spend this money, essentially becoming new breeding grounds for more corruption and maladministration. 

OUTA has objected to these new “administration” fees proposed by the Department of Transport in the notices gazetted last year. However, in the final version issued in January, the department simply reduced the fees slightly and forced these costs into the system, without any explanation as to why these additional fees should be applied in the first place. An online fee should not be higher than the fee charged at the offices; rather, the online fees should be substantially lower.

This action by the RTMC and the Department of Transport goes completely against the spirit of what President Ramaphosa said in his State of the Nation Address to South Africa last week about reducing regulatory burdens and red tape. 

“Moving into the digital age should not be disguised as making it easier for society to transact with the state and then slapping the public with service fee increases to the tune of 250% and more for this benefit.  This is nothing short of a gross abuse of power and must not be allowed to happen,” says Van Heerden.


A soundclip with comment by OUTA Senior Legal Project Manager Andrea van Heerden is here

Picture: OUTA