According to calculations, it was expected that the increase in the general fuel levy as well as in alcohol and tobacco excise duties would bring in an additional R2.6bn.
The fuel levy - now at R3.37/litre - is under increasing focus because of the record price we are paying for fuel. The projected revenue from the fuel levy this financial year is R77.5bn.
This year there have been four hikes, four months in a row, with the price for some petrol now exceeding R16/litre inland for the first time.
However, those advocating for a drop in the fuel taxes are not saying just how we will fund the resulting shortfall in the fiscus. A R1 per litre reduction in the fuel levy will impact Treasury’s income by about R23bn a year.
There are only two options available. The first involves raising other taxes. VAT went up this financial year from 14 to 15%. Would those advocating for lower fuel prices call for VAT to be increased to 16% to make up the revenue shortfall? Would they prefer personal taxes or business taxes to go up?
The second option would be to cut expenditure. But what do you cut? Health? Education? The police? It would be great if we could reduce corruption, but there is no budget for corruption. There are many failures our government must take responsibility for. But, in all fairness, the price of petrol is something the government has little control over.
So, while the DA and the Organisation Undoing Tax Abuse can hold as many marches as they like, they are not going to make any impact on the rand or on international oil prices. And it is these two factors that play the biggest role in determining how much we pay at the pumps.
The same is true of Visvin Reddy and his organisation, People Against Petrol and Paraffin Price Increase.
In June, Reddy urged motorists to wear black and to switch off their car engines for 10 minutes. Despite all these efforts, the price of fuel went up once again this week. It proves just how ineffective this line of protests has been.@TheCapeArgus