Customs

This economic and trade-focused column is prepared by Riaan de Lange – riaan@tariffandtrade.co.za. The views expressed in this column are those of the author.



Why provide a tax amnesty for non-compliance, but no similar or equitable dispensation for compliance? In addition to the tax amnesty, why then also grant a discount and preferential payment terms for the tax liability? For consistency, a ‘tax amnesty’ implies a limited-time opportunity granted to a specified group of taxpayers to pay a defined amount; this in exchange for the forgiveness of a tax liability, (including interest and penalties), relating to a specific tax period or periods and without the fear of criminal prosecution. Just to be clear on another - a ‘toll’ levied on the use of a road is considered a user charge or tax.

In May, following the recommendation of an advisory panel's report, the Deputy President announced ‘massive’ cuts to the Gauteng Freeway Improvement Project (GFIP) toll (known as the Gauteng e-toll) in Parliament. It included a 60% discount on money owed to the South African National Roads Agency Limited (Sanral). In addition, those currently in arrears will be granted six months to pay. (This is the carrot if you will.) Outstanding e-toll fees will be linked to the licence renewal system, and road users will have to settle their amounts owing to Sanral before new licence discs will be issued. (And this is the stick). Whether this is legal and enforceable is another matter.

The e-toll remains an emotional and divisive issue across all walks of life, particularly for those in the Gauteng province. Whilst government (national and provincial) contends that non-payment constitutes civil disobedience, a public coalition known as Opposition to Urban Tolling Alliance (Outa) launched initiatives to frustrate the e-toll implementation, such as claiming its introduction to be unlawful. An added complication in its enforcement is that owning an e-toll disc is not compulsory.

The e-toll ruckus is not envisaged to abate anytime soon, in part due to the unbridgeable opposing views the two opposing parties hold. Whilst Outa holds it to be unlawful, the Finance Minister indicated that the cost recovery from road users would continue to be the principal financing mechanism for the GFIP.

Back to the Deputy President’s announcement; it ignored a very important constituent – the compliant taxpayer. What reward is there for this constituent – individuals or companies? Are they but the simple fools? What are they to make of all of this? What reward is there for them in being tax compliant, and most importantly in remaining law abiding citizens? Where’s the equity and equality?

Those who did not pay their e-tolls are now afforded a 60% discount and 6 months to pay. Why are those who paid not also afforded a 60% refund on the e-tolls that they have paid or if not that, be afforded a 60% credit to offset against their future e-tolls?

Or is the message simply, if you are tax compliant, expect no reward, but if you aren’t, well you just wait

Did you know that internationally taxpayers are incentivised for tax compliance? Japan offers to have your picture taken with the Emperor if you are found to be ‘honest’. The Philippines puts your name into a lottery if found compliant with value-added tax (VAT). South Korea considers allowing access to airport VIP rooms and free parking in public parking facilities. In Finland tax credits earned for tax compliance can be used for different purposes, including nursing homes.

As a parting thought, the revised e-toll fee structure will no doubt lead to a funding shortfall for Sanral that will have to be supplemented by transfers from government, and then from revenue derived from compliant taxpayers. The bell seems to toll for the tax compliant. What if their days are numbered?

** The author and his family have no outstanding e-toll accounts, which as with others who are compliant, has negatively impacted their disposable income, with no reward. The nonsense that they have benefited from the improved roads - well so have the non-compliant and they continue to do so.