Outa has a plan to pay e-toll debts: more tax

The Organisation Undoing Tax Abuse (Outa) says that due to government’s delay in resolving the e-toll debacle, taxpayers will now have to pay mounting interest on debt for the freeway upgrades, which will probably equate to double the initial amount borrowed.

Outa CEO Wayne Duvenage previously said had Treasury and the SA National Roads Agency (Sanral) taken on the option of funding this from Treasury allocations, or by adding 10 cents to every litre to pay for the Gauteng Freeway upgrade from the start in 2008, the original capital value of the debt (of more than R20 billion) would have been raised by now.

“This [option] would have meant the collection cost of e-tolls, which is contracted at R1.6 billion per annum, would be negated and the capital portion of the 20 billion bonds would have been collected within 10 years,” said Duvenage.

He said the original debt initially stood at R21 billion but was now standing at double that because of accumulated interest.

All collections to date have merely serviced the administration costs, making it the most expensive tolling system in the world.

Duvenage said it didn’t help that the interest kept racking up every day, and government had to make a decision on how it planned to pay off the debt.

He suggested that Treasury gave Sanral the money it needed to maintain roads and, if it couldn’t, the best option was still to increase fuel levies or use monies that were acquired from other forms of tax.

He suggested that an additional levy of 20 cents a litre, double the previously proposed 10 cents in 2008, was now a viable option to raising the debt in the next 20 years, due to the additional interest which has made the financial situation worse.

Duvenage added that the application of ring-fencing tax was also a viable option to hold the government accountable to paying off the debt with the taxes acquired.

“Government should seriously consider ring-fencing taxes for a specific application, because they can.

“It appears they just don’t want to because they know it will enable society to hold them accountable for spending,” he said.

For more news your way, download The Citizen’s app for iOS and Android.