VAT And Fuel Price Hikes: The Unnecessary Burden On South African Pockets

PICTURE: Hindustan Times

From the euphoric developments like the unseating of a despised president to the first positive Cabinet reshuffle in almost a decade, but then the depressing surprises of a VAT increase and weighty consecutive fuel price increases,” writes MUHAMMED ZAHID JADWAT.

It has been a bumpy ride for South Africans thus far. In the stint of less than a year, we’ve seen and experienced a lot. Particularly, the negative one of fuel prices has stirred much anger while catapulting the poor into deeper pockets, with an unfazed government of corrupt delinquents plundering scores from the heaps of tax raked from the people.

The price of petrol stood at a considerate R6.92 in July 2008 and increased exponentially to R15.53 in July 2018 at the coast, and from R7.16 to R16.02 inland – nearly tripling in the last decade translating into a whopping 124. 42% and 123.74% respectively.

Reason for the price hikes? External factors, they claim.

Actually, these external factors such as oil prices and a weak Rand shouldn’t be too much of a problem. Some of our neighbouring countries source their petrol from South African-based SASOL, yet, on average, sell fuel around R5 cheaper than the price in the manufacturing country!

Instead of further burdening a financially strapped nation with exorbitant fuel prices and a VAT increase, the government should have explored other methods to garner the deficit.

1. Reduce the size of our ridiculously large cabinet

It is no secret that the incompetent cabinet President Cyril Ramaphosa inherited from Jacob Zuma costs South Africans a prodigious amount totalling nearly a billion Rand, R720 million to be precise.

Getting rid of all unnecessary departments through merging should actually be one of President Ramaphosa’s top priorities. Here are millions to be saved, but elitist favour demands otherwise.

2. Reduce the almost useless levies

Most parastatals were infested by the pervasive network of Gupta-brokered corruption and are now going through the consequences.
In particular, the Road Accident Fund has failed. It bites a chunk of R1.93, yet financially it continues to hover in the red with contingent liabilities amounting close to R190 BILLION! 

Much of the company’s income has been unaccounted for, leaving us all to wonder whether it’s worth to continue contributing to something clearly lacking credibility and accountability.

The fuel levy has a similar negative story to tell. Where are all those billions? Why don’t we see the benefits? 

3. Do away with government-regulated prices

I recently read an interesting article by Martin van Staden of the Free Market Foundation who proposed a good way to force the prices of our fuel down by enabling competition in the industry.

This, he writes, is normal in most countries except South Africa. For instance, in the United States, a consumer can drive just a few kilometers more and fill up for less, which obviously forces other companies to lower their prices to win customers.

4. #TakeBackTheTax

This is a new campaign that could affect the return of BILLIONS if its calls are heeded by top-ranking officials in the government. 

It has revealed that around R7 BILLION are lost to illicit trade of cigarettes. A lot could be done with this money, and again, the government just prefers the easy way to raise funds instead. 

That said, let’s wait for the government to heed our calls. Hopefully, it isn’t too much to ask to be relieved from fuel price increases and a VAT increase meant to make us pay for money that was stolen from our own pockets.

Jadwat is guided by the belief that the power of writing has a major impact on the thoughts of the reader. Together, let’s #RebuildAfrica. Twitter: @zahidjadwat