Johannesburg - The National Treasury is hypocritical for saying it is not in favour of ring-fencing taxes when it has done so for certain infrastructure projects, Business Unity SA (Busa) said on Friday.
“Ring-fencing of taxes is one way which government can enforce accountability in government agencies,” Busa economic policy executive director Kgatlaki Ngoasheng told the advisory panel on e-tolling in Gauteng and its socio-economic impact.
“The National Treasury, which often indicates that it is not in favour of ring-fencing taxes, has actually recently implemented this particular ring-fencing of taxes for infrastructure financing of Transnet... talk about hypocrisy.”
Ngoasheng said Busa was in favour of funding the Gauteng Freeway Improvement Project (GFIP) through the fuel levy, which involved the ring-fencing of taxes, as opposed to e-tolling.
“We have been advocating for alternative funding to the e-toll model, largely because the general fuel levy widens the revenue net and guarantees compliance,” he said.
Using the fuel levy would cause less “pain” in Gauteng because the pain would be spread out across the country.
“It is not mentioned that the revenue generated by Gauteng partly subsidises service delivery across the country, and yet when other provinces have to partake in ensuring that Gauteng thrives so that they too can thrive - it attracts criticism.”
He said ring-fenced tax examples included the solar water geyser fund, which was taken from the electricity levy, and the portion of the fuel levy given to the Road Accident Fund.
Ngoasheng said Busa was also in favour of “shadow tolling” - which still involved the fuel levy, but not the ring-fencing of taxes.
“It is the same process, but only you don't dedicate it to the specific funding of a project. It probably could be collected and be part of the fiscus.”
The panel, which is holding hearings in Midrand, is focusing on the implications and perceptions of financing the GFIP and e-tolls.
On Monday, the Gauteng provincial government announced the panel would embark on a month-long consultation process, starting on Wednesday, with organisations and individuals.
Organisations were invited to make submissions on the economic, social, and environmental impacts of the GFIP and e-tolls.
The panel was expected to report to premier David Makhura at the end of November. - Sapa