Online licence system’s hidden price hikes

By Myles Illidge for MyBroadband

The Organisation Undoing Tax Abuse (Outa) has said that the Road Traffic Management Corporation’s (RTMC) fees for South Africa’s new online vehicle and driving licence renewal system are exorbitant.

Outa CEO Wayne Duvenage said that although it is promising to see such systems transition to digital form, as far as they are concerned, the administration costs for these new systems are hidden taxes.

Duvenage spoke to Talk Radio 702’s Bongani Bingwe regarding the administration fees.

“Last year, when they put out a Gazette to ask for comment from the public about it, we saw the fees, and they were exorbitant, extremely expensive. They started out at R750 per transaction,” he said.

These fees were subsequently reduced but remain high.

“So, good move to get into the digital age, but at this cost, these are hidden taxes as far as we’re concerned.”

He used the example of having vehicle ownership changed, which is 350% higher when doing it online.

“If you go to the offices and have your vehicle ownership changed, it’s about R150 for the administration fee. If you want to do it online, it’s R530,” he said.

Duvenage said that these were services initially provided as a component of taxes in the past, funded by the Treasury.

According to Duvenage, Outa views the transition to administration fees as another money-making scheme.

“What happens is they take themselves off of the need to rely on Treasury, there’s less oversight, and this is where the money-making takes place,” he explained.

“As we saw last year or the year before, Japh Chuwe, the CEO of the RTIA, had a salary which was very high at R3.3 million, [he] increased it to R10.8 million in one year.”

Duvenage explained that, while set up costs surrounding these systems might be high, the departments should be able to wind down costs over time.

“All these offices are going to, over time, require less staff, less manning, less electricity, less counters, and that’s the way you want to go. You want to get people to use digital,” he said.

However, he stated that there appears to be a trend within South Africa’s government to turn these departments into profit centres.

“We see this with the RTMC, the RTIA, the DLCA. Every one of these organisations within government are making massive profits. They are turning themselves into profit centres, and this is where the breeding grounds of corruption and maladministration takes place,” he said.

Duvenage said there was a legal route to take against the exorbitant fees, but Outa would instead engage with the minister of transport and the Treasury to find out more.

“If we have to, we’ll go there, but right now, we want to enquire and ask what the rationale is. We want to get Treasury involved because we don’t think they’re actually watching what’s happening here,” he explained.

“If we don’t get on top of this from all oversight entities, even the auditor-general, then we are going to see a lot of abuse of power and a lot of waste of money.”

When asked whether he is concerned that the system may still be open to corruption despite it being moved online, Duvenage said that it does remove a lot of the threat of corruption.

“I think it does remove a lot of the corruption, but we’ve got to watch the costs,” he stated.

“A number of years ago, the RTMC was getting below R30 per transaction, and they’ve upped that to over R70 per transaction. On top of that, they want to slap on these additional administration fees.”

“We need to have an efficient government, but we need to have a government at lowest cost production to society,” Duvenage added.

“They cannot develop these massive cost centres, or profit centres so to speak, and then watch how they misspend the money. That’s really futile and not acceptable to society.”

 

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