Fuel levy draws more into tax net
DA LEADER Mmusi Maimane, among many others, is calling for a reduction in the fuel levy. He is also calling on the public to protest outside the national Treasury offices. But before one runs across the road with all the other chickens, consider the following.
The government recently increased VAT (just one of the taxes and levies it increased) because its expenditure exceeded its income. Even if just a R1 per litre reduction is granted, it will amount to a significant reduction of funds flowing into the state’s coffers. To make up for this R1 per litre loss of revenue, the government will simply increase the taxes and levies on the other items.
There are many people living in South Africa who aren’t registered taxpayers but who use vehicles to make a living, like mini-bus taxis, to name but one example. These operators are therefore drawn into the tax net by virtue of the fuel tax.
Do you want to subsidise those operators to the tune of R1 for every litre of fuel they purchase by paying more tax on other items? No, I didn’t think you would.
Campaigning for a reduction in the fuel levy is treating the symptoms and not the cause. A significant percentage of the government’s income is stolen by corrupt ANC officials. Rather campaign to root out those criminals, after which the fuel levy could easily disappear altogether.