Economists warn SA that more taxes, fuel increases are on the way

Economists warn SA that more taxes, fuel increases are on the way

- Economists are adamant that the government is scrambling to collect funds in the wake of state capture looting and financial mismanagement

- South African taxpayers are expected to pick up the slack, with tax increases and heavier fuel levies forecast for the not-so-distant future

- Currently, the local motorist pays 59% of the cost per litre in levies, with more on the way as of 1 June

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With carbon tax looming on the horizon, economists predict that fuel price increases are here to stay as the state scurries to source 'desperately-needed' funds.

The new tax, promoting the 'polluter-pays' policy, was announced during Tito Mboweni's budget speech, with the finance minister saying it would help salve the damage done by carbon emissions and encourage a greener footprint.

Expected to come into effect next month, the carbon tax will consist of two phases from 2019 to 2022 and from 2023 to 2030, reports The Citizen.

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All sectors will now be liable for the greenhouse gases they emit, including businesses, private individuals and even state-owned entities.

The Automobile Association predicts that the implementation of theill will add an additional 9 cents to every litre of petrol, and 10 cents to every litre of diesel:

“Our hope is that the new government will immediately set out a policy agenda which has a direct impact on fuel prices.”

Economist Jannie Rossouw is less optimistic, saying the increase will be expected with a weak exchange rate and a higher cost of oil. He commented on the situation, saying that:

“The government needs money desperately because of the previous Zuma administration, which stole money. So we should brace for more taxes. We may even see a 16% increase and other taxes of all sorts soon.”

Wayne Duvenage, CEO of the Organisation Undoing Tax Abuse, says that the government's push for levies was borderline excessive.

Duvenage claims that the levies combined compromise 59% of the cost per litre at the moment, excluding the new carbon tax:

“It won’t go down, the government has become too reliant on the revenue they get from these taxes that it’s become excessive. It only adds to the problem because it’s not only drivers that suffer, markets are affected and the poor.”

With reports that US President Donald Trump has attempted to negotiated lower oil prices, Rossouw remains skeptical that the move will benefit South Africa:

“Opec won’t listen to Trump, they want the highest oil price! It’s like asking Zuma to go to jail, it will not happen. This is just basic economics.”

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Source: Briefly.co.za

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