Anatole France, a French writer, once wrote, “The law, in its majestic equality, forbids rich and poor alike to sleep under bridges, to beg in the streets, and to steal their bread.” Contained in this quote is the explicit hypocrisy of equality in a capitalist democracy.
Among the most taxed categories of persons in South Africa are motorists. Their taxes are applied equally regardless of the income differences, which obviously squeezes the poorer more. Obviously economists will tell you that some of the charges are not tax, but I call them taxes mostly because they are and they serve more or less the same purpose as what is called taxes.
If you are in Gauteng, and you live from hand to mouth due to a high cost of living, you’re likely to move to living on debt when the e-toll is introduced. If you are already living in debt, then you are likely to face prosecution as you get “taxed to death”.
In the current financial year, 2010/11, road users are paying 3 taxes on fuel;
1) General fuel levy at R1-67 per litre (93 Octane),
2) Road Accident Fund levy at 72 cents per litre and
3) Customs and excise levy at 4 cents per litre
This means in total, for every litre of petrol a car owner fills in their tank, R2-44 is taxes. That constitute 31.6% of the price for each litre of petrol.
As of September 2010, if you car emits any thing above 120 g/km of Carbon Dioxide (CO2), you pay R75 for every g/km. This means if your car emits 121g/km you pay R75, if the emission is 122g/km you pay R150 and so on. This adds more than R3600 to the price of a Toyota Corrolla. The emission numbers come from the manufacturers of your vehicle and the consumer carries the price for the fuel ineffecient car.
Apparently, this additional cost arising from Carbon tax is added to the car cost before the VAT (Value Added Tax). This could mean a consumer pays a further 14% tax on another tax.
If you thought the above taxes are enough, you thought wrong.
Motorists pay at toll roads for road usage. Apparently this money goes to the maintenance of the road infrastructure and often to the expansion and/or improvements of the roads. The pricing structure is determined by SANRAL and varies from route to route.
Notwithstanding that tolling is a form of a tax, its pricing is inclusive of VAT, making it a tax on a tax.
There has been significant road improvements in Gauteng, especially in the build up to the 2010 FIFA World Cup. In some parts, freeways have up to 5 lines, even though more often than not 1 or 2 of the lanes are always closed erroding the benefit of additional lanes.
However, it seems, as from June 2011, road users will have to start paying a heavy price for the maintenance and future improvements. If you don’t pay, you instantly turn into a criminal and may face prosecution. SANRAL website says, wait for it, “In the event of non-payment of toll, debt collection fees will be added to the toll tariff, a debt collection process and/or a prosecution process will commence.”
In case you are taxed to death, and literally die, you still have not escaped the burden of taxes. This is not an attempt at humour, when you are dead you really have to pay, not one, but 2 taxes. Both estate duty and capital gains tax are payable upon death.
Perhaps with the exception of taxes upon death, all these taxes affect the rich and the poor road users equally.
Those who are not car owners are not any better. The retail stores mostly depend of road freight for the delivery of their stock. The freight business transfers these costs to wholesalers, who transfer these costs to retailers, who transfer these costs to consumers. In the perpertual transfer of these tax costs, VAT is charged, leading to consumers paying even more. The same goes for public transport operators such as buses and taxis who transfer these costs to passengers as well.
Bread, and other basic food stuffs maybe tax free but transporting them on road freight adds the costs of these taxes to those food items. It makes their tax-free status ring hollow.
Thousands of innocent citizens around will soon turn into criminals due that they can’t afford paying additional taxes. A capitalist society permits a situation where low-skilled, and thus, low-paid workers are charged extra taxes they cannot afford and then prosecuted for their failure to afford those taxes.
The good intentions of tax breaks for certain income brackets are eroded by these multi-taxes, which are universal.