logo
Latest News
Follow
Thursday / 20 June 2024
HomeNewsYou will pay Gauteng’s R43-billion e-toll debt – One way or another

You will pay Gauteng’s R43-billion e-toll debt – One way or another

Gauteng’s e-tolls are finally being shut down this April, but South African taxpayers will be on the hook for at least a portion of the failed project’s outstanding debt.

After more than a year of delays, the National Treasury and the Gauteng Provincial Government (GPG) have reached an agreement that the former will pay 70% of the e-toll scheme’s debt, while the latter is responsible for the remaining 30%.

Consequently, the National Treasury is obligated to pay R30.1 billion of the R43 billion debt accumulated by the South African National Roads Agency’s (Sanral’s) e-tolls.

Since the treasury’s income is derived from all the taxes paid in the country, this means all South Africans are now paying for the shutdown of the controversial tolling scheme, regardless of what province you live in.

You get to pay, you get to pay, everyone gets to pay!

More than a third of the National Treasury’s funding comes from personal income taxes, but other major contributors include company income tax, VAT, and custom import duties.

As a result, the R30.1 billion being paid to Sanral is effectively a bailout funded with taxpayer money, writes MyBroadband.

The remaining 30% must be paid by the GPG, meaning that residents in that province are responsible for an additional R12.9 billion.

Adding to the province’s tab, Gauteng must contribute a further R4.1 billion to Sanral to compensate for backlog maintenance conducted on roads that form part of the Gauteng Freeway Improvement Project (GFIP).

In February 2024, Gauteng Treasury MEC Jacob Mamabolo announced that the government is borrowing money from “financial institutions” to pay for the R12.9-billion debt.

However, the province is allowed to pay back the smaller maintenance backlog over a period of four years starting in 2025, which should allow it to avoid borrowing even more funds than it already has, said Mamabolo.

Outside of Gauteng, the national government derives most of its revenue from provincial taxes such as vehicle licencing fees, gambling, betting, and excise taxes.

According to the most recent budget report, an estimated R2-3 billion of government income set aside to pay back the loan will come from one of these sources.

In response, the Democratic Alliance (DA) said it would fight any options that would add to the financial burden of Gauteng residents.

As for the national debt, the National Treasury’s taxes are redistributed to all nine provinces based on their demographic and income profiles, and Gauteng typically receives the most on account of it being the most populated province.

In 2023, Gauteng was allocated R143 billion of the R660 billion earmarked for all provinces, so the R30.1 billion it needs to pay is a significant portion of its annual funding.

What happens next

Gauteng’s e-tolls will finally stop billing motorists at 23:59:59 on April 11, 2024.

Transport minister Sindisiwe Chikunga confirmed that the tolling infrastructure will instead be used for crime prevention going forward, so while the tags will no longer beep when motorists drive through the gantries, the distinctive blue lights illuminating the freeway are not going anywhere.

Furthermore, the e-tags will still be valid at conventional toll plazas and for parking payments, provided there are sufficient funds on the account, and any transactions made prior to April 12 will still need to be paid.

The answer to whether compliant motorists will be refunded, or indebted motorists pursued, is still up in the air.

“As the implementing authority, Sanral has not received any information regarding the refunding and/or prosecution of outstanding e-toll fees,” said the agency.

“Once an instruction has been received in this regard from its political principle, Sanral will inform its customers accordingly.”

Show comments