Pretoria - With the increases in vehicle, petrol and road tax announced by Finance Minister Pravin Gordhan earlier today, accounting and consulting firm Grant Thornton says it is a relief that Transport Minister Sibusiso Ndebele has suspended the tariffs gazetted for the tolling of Gauteng's freeways.
The firm said the ripple effect of tolling would have impacted Gauteng and SA's domestic tourism at a greater extent than anticipated.
"We're relieved and thankful that the Transport Minister has suspended the tolling process until further investigation has been undertaken," said Gillian Saunders, director and head of Grant Thornton Advisory Services.
According to Grant Thornton, the 66c per kilometre toll charge would increase the average running costs of a mid-level car as per the Automobile Association (AA)'s rates by 40 percent.
"This massive increase in the cost of travel would have had detrimental ripple effects on the entire national economy, just as significant petrol price increases do," says Saunders.
She said this would impact on delivery and transport fees for food and all goods, as would general tourism costs such as car hire and personal recreational travel, adding that companies may even think twice before setting up business in Gauteng if transport costs were inflated compared to the rest of the country.
Increasing people's spend on transport directly impacts a population's propensity to spend on tourism, travel and leisure. "The Gauteng tourism industry and general recreational activities in the province would directly be impacted - and Gauteng is a prime domestic tourism destination which could suffer a decline in domestic tourism and recreational travel," Saunders warned.
In terms of business tourism and conferences hosted in the province, spend on business travel for conferences in Gauteng would most certainly have been affected.
In his Budget Speech, Gordhan announced an increase in the fuel levy by 10c/l on petrol and diesel, effective from 6 April 2011. The Road Accident Fund levy will be increased by 8c/litre on the same date.
Government is also set to increase the "luxury tax" on motor cars. Passenger cars and light commercial vehicles are already subject to a "luxury" excise tax that increases with the price of the vehicle. The new Budget proposed that this maximum nominal ad valorem excise tax rate on these vehicles is increased from 20 percent to 25 percent.
"It seems that the impact of taxes on vehicles, petrol and other levies are already affecting the taxpaying population significantly - which would have made the Gauteng highway tolling system a very difficult pill to swallow," said Saunders.
She added that the firm would await further feedback by the panel of experts assigned to assess the toll issue further.
