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The solution to the Gauteng tolls announced in the Budget on Wednesday was not ideal, the National Association of Automobile Manufacturers of SA (Naamsa) said.

“The automotive industry would have preferred to see freeway improvement programmes being financed through an administratively more efficient and less costly fuel levy,” Naamsa president David Powels said in a statement.

Naamsa, however, welcomed Finance Minister Pravin Gordhan's announcement that a special R5.8 billion appropriation would be paid to the SA National Roads Agency Limited to ease the toll burden in Gauteng.

Motorists would now pay 30 cents a kilometre, instead of 66 cents as originally proposed.

Naamsa had in general welcomed the Budget given the slower growth in the domestic economy and uncertain global economic outlook.

“The minister had tabled an appropriate and disciplined set of budget proposals intended to support growth, employment and poverty alleviation through targeted interventions,” Powels said.

“Particularly noteworthy was the substantial expenditure earmarked for competitive enhancing capital infrastructure development focusing on projects in the energy, transport and logistics sectors.”

The R9.5 billion in personal tax relief would have a positive impact on consumer sentiment and demand, which could in turn help vehicle sales.

However, Naamsa was concerned that the increase in capital gains taxes for individuals and companies was unexpected and could prove counterproductive in promoting investment.

The association endorsed the public sector infrastructure programme, support for industrial development and economic zones, the rollout of employment programmes and the investment in further education and skills, Powels said.

Of concern was the funding for the proposed national health insurance system.

“These matters required careful evaluation, including detailed impact assessment, so as not to prejudice future consumer demand and economic growth in South Africa,” Powels said. - Sapa