‘Don’t do it, Minister’ says AA ahead of budget
The two major taxes are the General Fuel and Road Accident Fund levies which comprise around 40% of every litre of fuel sold in the country
INCREASING both the fuel levies and Value Added Tax (VAT) will be a double blow for consumers and the motor industry as a whole.
This according to the Automobile Association (AA) ahead of the 2020 Budget to be delivered by Finance Minister Tito Mboweni in Parliament on Wednesday.
‘The Minister will have to walk a trickier fiscal tightrope than many of his predecessors and he will undoubtedly be seeking relief from different quarters to ease the country’s financial burden.
‘Previous years have seen higher than inflation-linked increases to the fuel levies – the General Fuel Levy, the Road Accident Fund levy, customs and excise taxes and the Carbon Tax.
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‘However, given the fact that many South Africans are buckling under severe financial constraints, such an increase this year will be more than detrimental, it could be catastrophic,’ the Association said.
The two major taxes are the General Fuel and Road Accident Fund levies which comprise around 40% of every litre of fuel sold in the country.
‘Currently these taxes amount to R5.59 on every litre of petrol and R5.47 on every litre of diesel.
‘Neighbouring countries who buy fuel directly from South Africa do not add these taxes, making their fuels cheaper than in the country which supplies them,’ the AA said.
Any increases announced by the Minister on Wednesday will come into effect in April.
‘We have seen in the past that any increases to the fuel levies is met with a swift increase to public transport fares including those of taxis.
‘While a slight increase, even one in line with inflation, may not seem drastic, it has an enormous impact on the lives of consumers who rely on every cent to make it to the end of each month.
‘These increases are therefore extremely harmful to the majority of citizens and should be considered an absolute last resort by the Finance Minister,’ the AA said.
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