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Toxic Tax

Another hike in the fuel price due to another Carbon Tax – on inferior quality fuel. The Machiavellian logic behind this toxic tax would have been funny if it was not so tragic, reckons Paul van Gass.

It is a script not even the writers of the controversial final episode of Games Of Thrones (for those who followed the GoT series to the bitter end) would have been able to emulate, and it again shows that real life occurrences are sometimes stranger than fiction.

A new Carbon Tax was introduced this month in South Africa; over and above the carbon tax already applicable to new vehicles since 2010. The result of this is another hike in the fuel price – adding another nine cents a litre to the petrol price, and ten cents to the price of diesel – while the quality of local fuel has remained virtually the same over the last decade.

Therefore, the local motor industry and motorists are in reality being taxed double on something they can do nothing about – inferior quality fuel, as the Automobile Association of South Africa (AA) calls it – despite not having access to higher quality fuels that are available in many other markets in the world.

So, how come we find ourselves in this ludicrous situation? Well, in short, the government is not willing to subsidise upgrades to existing fuel refineries, while the fuel companies maintain such upgrades will be too expensive without any incentives or subsidies from the government. Who are the biggest losers in this fight? The ones on the side-line.

In a statement the AA said the tax was “grossly unfair”, while the Organisation Undoing Tax Abuse (Outa) went even further, calling it a “cynical abuse of public sentiment under the guise of tackling climate change” and describing it as “disingenuous”, since there are no clear links to behavioural changes or in line with climate change mitigation initiatives.

“This carbon tax on petrol is just another revenue stream for the government coffers,” the statement by the organisation read, also raising concerns that the tax will push up the price of consumer goods. They are right, of course. Together with the original carbon tax on new vehicles, it is another toxic way to get more money for the government.

The frustrating thing is that with a defunct railway system, an unreliable power utility, ageing truck fleet, and disrupted public transport infrastructure no viable alternatives are available – and none seems to be forthcoming from a government running on empty.

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