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.”


OUTA warns of e-toll malware scam

OUTA has notified members on its Facebook page that a highly suspicious SMS is doing the rounds with regards to e-tolls.

The organisation notes that before members of the public can appear in any court for any matter, they need to be summonsed.

This SMS is a scam to cash in on people’s fear in light of the current uncertainty around e-tolls. The link contains a link to documents which contain malware. The public is advised not to open the link, and to delete the SMS immediately.

First e-toll case heads to court

Source: MyBroadband, Netwerk24 

According to a report by Netwerk24, the first e-toll test case will be heard in the North Gauteng High Court in Pretoria.

The report states that the test case will involve the transport company Thandanani Packers & Hauliers, which owes R400 000 in e-toll bills.

The company has stated that it cannot afford e-tolls, and if they were forced to pay this money the business will need to close.

Outa said the case will focus on the overall legality of the e-tolls system and will be used for the main dispute of the overall “legality challenges” to the e-tolls system itself.

The legal team for the supporters of Outa wanted Sanral to suspend enforcement of all other e-toll legal claims against motorists, but Sanral’s team would not agree to this.

“Sanral’s lawyers said a general stay could not be agreed whilst road users were being encouraged not to pay e-tolls,” Outa said.

Sanral added that it would continue to issue a significant number of summonses and proceed with e-toll claims.

OUTA calls for national fuel march

The Organisation Undoing Tax Abuse (OUTA) has called on all citizens to join the group, and other organisations including faith-based movements and taxi associations, to put pressure on government to reduce the fuel levy by R1.

At 10h00 on Tuesday 31 July, OUTA and other groups will gather in Church Square, Pretoria, to hand over a memorandum to the National Treasury, calling for the reduction in the general fuel levy.

“South Africans have suffered under the burden of high taxes, maladministration and corruption for far too long. The exorbitant increases in the fuel levy during the Zuma era can be linked to Government’s need to increase its revenue to cover the costs of corruption that have permeated our state and continue to cripple our economy. Government leadership needs to do the right thing and reduce the fuel price by R1, if they are serious about easing consumer pressure, ” says Ben Theron, OUTA COO.

Concerned citizens are encouraged to lend their voices and participate in sending this important message to Government, by assembling at Church Square in Pretoria Central on Tuesday 31 July. In addition, social media activists can change their profile pic in the build-up and on the day of the march. OUTA will be making images available on www.outa.co.za.

“OUTA is an a-political organisation, that encourages people and movements from all sectors, including parties and labour unions to join us on Tuesday,” adds Theron.

E-Tolls: Makhura admits system failure

In his State of the Province address on Monday, Gauteng Premier David Makhura acknowledged that the highly contested e-tolls system in Gauteng has been a failure. Makhura’s comments follow a number of years of resistance to the multibillion-rand e-tolls project by civil organisations and motorists.

“It’s loud and clear for all to see that e-tolls have not worked,” Gauteng Premier David Makhura said during his State of the Province address.

But it’s not the first time that Makhura has admitted that the e-tolls system was ill-conceived.

Delivering his 2017 State of the Province address, Makhura said: “We are mobilising resources for public transport infrastructure in ways that will ensure that we do not commit the same mistakes done with the e-tolls. We can’t build roads and only later inform citizens that they must pay. In fact, there will be no new e-tolls on our new roads.”

He added: “I must admit publicly, as I did last year, that all the efforts we have made through the advisory panel have not led to the resolution of concerns of Gauteng motorists regarding affordability. We have tried our best. The ultimate solution can only come from national level. We will continue to engage in order to represent the interests of our residents.”

On Monday, Makhura again admitted that e-tolls had failed and that the implementation of the system had increased the cost of living for many motorists and commuters in Gauteng.

Drawing from Ramaphosa’s envisaging of a “new dawn” in the country, Makhura said: “The new dawn must also bring a solution to the protracted and unresolved problem of e-tolls. Accordingly, I will engage President (Cyril) Ramaphosa in order to find a new and more equitable funding model to support the continued expansion of Gauteng’s road network and public transport system. Please send me!” he said.

The Organisation Outdoing tax Abuse (Outa) said it was in total agreement with Makhura in calling for a new and more equitable funding model to expand Gauteng’s road network.

“The compliance rate of e-tolls, based on the South African Roads Agency’s (Sanral’s) own version in their 2017 Annual Report, is 29%. If this figure is correct, it is clear that the system has failed. SANRAL could not in more than four years succeed to ensure a higher compliance rate. If compliance on this scheme doesn’t go up to at least 85% the scheme will never survive,” Outa’s Transport Portfolio Manager Rudie Heyneke said.

Heyneke said OUTA would not back down on the issue of the unaffordability of e-tolls, and would further engage the Minister of Transport, the Presidency, and the executive on the matter.

He said the organisation was busy preparing a submission for the Minister of Transport and the Presidency, and would in the near future engage with the executive to show the negative impact e-tolls have on the taxpayer and on the Sanral budget and proposed alternatives.

The writing has always been on the wall. Apart from firm resistance from Gauteng’s motorists, the highest compliance level ever achieved was 40% in June 2014, according to information released by Outa. This was achieved at R120-million and around R140-million short of target.

“The collection costs and litigation costs are too high when measured against the revenue generated by e-tolls,” Outa said in a statement.

Sanral had argued in court that it could achieve a payment rate of 93% which would generate the R260-million required to cover the cost of the project and the R22-billion borrowed for the freeway upgrade project.

But none of Sanral’s targets has been reached despite aggressive marketing and offers of discounts of up to 60% to all e-toll defaulters to encourage them to settle outstanding bills. According to Outa, by May 2016 less than 2% of outstanding bills were settled while e-toll bills increased to over R2-million a month. The cost of administering the e-tolls were capped at R1-billion a year.

When the e-tolls system was about to be rolled out, motorists and taxpayers objected vociferously, particularly over a lack of proper public consultations prior to the implementation of the system. This outcry as well as warnings from civil organisations like Outa were ignored.

Outa Chairman Wayne Duvenage told Daily Maverick the organisation was pleased with the premier’s acknowledgement. Duvenage said the issue was not only a provincial matter, but also a national one.

“E-tolls were a bad decision,” Duvenage said.

By Bheki C. Simelane for Daily Maverick

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