E-tolls are ridiculous: economist

A leading economist has again questioned the functionality of the e-toll system on Gauteng’s freeways, citing the province’s tax contribution which already supplements large portions of the country’s infrastructure.

It comes on the back of a third successive petrol hike of 39 cents, set for midnight on Tuesday (4 February), which is expected to put consumers under further pressure.

In an interview on SABC, Chris Hart, chief economist at Investment Solutions, called Sanral’s e-toll system ridiculous.

“It’s such a concentrated tax – and that’s why people are rejecting it, because it means that infrastructure is paid for by the general taxes in other provinces, but in the province that actually carries the tax base, you have got to pay for it separately. This doesn’t make sense,” he said.

“And that’s why it doesn’t resonate,” Hart said of the public outcry following its implementation on December 6, 2013. “It’s a very concentrated cost on a tax base that is feeding other provinces.”

Gauteng’s contribution to South Africa’s Gross Domestic Product (GDP) is at approximately 34.5%, with KwaZulu-Natal second, contributing only 16.5% to the national economy.

“Gauteng’s contribution to the economy is critical, as it allows for the state to generate enough revenue to build schools, health facilities, roads and houses not only in Gauteng, but for the rest of South Africa,” the Gauteng Economic Development has said.

Moreover, nearly half (46.5%) of the country’s taxable personal income is generated by Gauteng residents, according to the SA Revenue Service.

Gauteng is home to just under a quarter of the country’s population – 12.7 million people.

Transport Minister, Dipuo Peters has previously dismissed the idea of using a fuel levy to pay for the roads, saying that it would be unfair for people in Gauteng to expect people from around the country to pay for roads in the province.

“So we are saying, it is important that the user, the one who uses that particular road…must be the one who pays for it,” Peters said.

This article was first published on BusinessTech.

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E-tolls are ridiculous: economist