Transport department under fire over proposed driver’s licence card renewal fee hike

The Department of Transport (DoT) is thinking about increasing South Africa’s driver’s licence renewal fees to generate additional revenue.

This was recently confirmed by Transport Minister Barbara Creecy, who spoke to Newzroom Afrika about the department’s plans to raise the driver’s licence validity period from five to eight years.

She explained that because a longer validity period would result in fewer renewals, the DoT would likely have to increase renewal fees to compensate for the loss of revenue for the Driving Licence Card Account (DLCA) – the entity responsible for printing the country’s licence cards.

However, this suggestion has been criticised by the Organisation Undoing Tax Abuse (Outa), which argues that increasing the validity period should not automatically necessitate a price hike.

Outa stated that while it supports the decision to increase the country’s licence validity period, there is no reason why motorists should have to pay more to receive their cards.

Outa executive director, Advocate Stefanie Fick, told MyBroadband that the longer duration will result in reduced queues and a lower cost-to-serve per motorist.

In other words, fewer renewals means fewer administrative costs, and so there shouldn’t be a need to hike renewal fees in order to make up for a loss of revenue.

She stated that the longer validity period should not become a pretext for extracting more money from citizens.

In light of this, Outa is calling for the DoT’s cost study to be made public before any decision is made to adjust the licence renewal fee.

“Minister Barbara Creecy said the department may increase fees if the extension proceeds; if that is being considered, the full cost basis must be made public first,” said Fick.

“Government is not a profit centre. The DLCA must charge a cost-reflective fee that covers efficient production and distribution of cards — nothing more”.

She further argued that if the DoT is concerned about losing money, it should improve its efficiency and reduce costs instead of forcing motorists to pick up the tab.

Outa is demanding that all line-item costs, including card stock, chips, printing, labour, and distribution, as well as throughput assumptions under an eight-year cycle, be made public.

It also wants the DoT to benchmark its plans against comparable jurisdictions and make these findings public.

“Absent this transparency, any increase would be premature and unjustified. This is consistent with Outa’s long-standing position that extending validity reduces pressure and costs across the system.”

“Before asking the public to pay more, the department must run a clean, competitive procurement, and show how governance improvements will lower unit costs,” said Fick.

Outa highlighted the recent Idemia debacle, where the tender to procure a new driver’s licence printing machine was flagged for several irregularities, including a bloated budget.

With this in mind, Outa moratorium on any licence renewal fee hikes until the tender is lawfully reissued.

“Motorists should not be punished for government inefficiency. Extend the validity, fix the waste, publish the numbers.”

Taking their time

Creecy has stated that the DoT will not rush the process of extending the driver’s licence card validity period in order to avoid “unintended consequences.”

She emphasized that the change will go ahead, but that the department needs to complete its cost study to determine the impact a longer validity period will have.

If it finds that the DLCA will lose too much money, the DoT will likely increase renewal fees.

“Once we take the decision, we should not be in a situation where later we say, ‘Whoops, there were unintended consequences,’” said Creecy.

“But I do hope that this year, this is something we can put to bed once and for all.”