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Treasury defends fuel levy increase

Treasury defends fuel levy increase

Eyewitness News2 days ago

CAPE TOWN - The Treasury has defended an increase in the fuel levy, saying if it doesn't raise it in line with inflation, it would become worthless over time.
The fuel levy has been left unchanged for three years to mitigate the impact of high oil prices at the time it was frozen.
The Economic Freedom Fighters (EFF) is going to court next week to challenge the legality of imposing an increase as part of the national budget, saying that the finance minister had failed to issue a government notice to this effect, nor had he introduced a bill in Parliament.
The price of petrol will increase by at least 16 cents per litre on Wednesday.
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• MPs say impact of fuel levy increase will be 'far worse' than VAT hike
• EFF accuses Treasury of replacing VAT increase with fuel levy hike
• Automobile Association slams new fuel levy hike
The Treasury said that increasing the value-added tax (VAT) rate could not be equated with raising the fuel levy.
Responding to public submissions on the budget in Parliament on Friday, Treasury's head of tax policy, Chris Axelson, said that the fuel levy was the country's fourth-largest revenue source, contributing about five percent to total tax revenue.
"This is a specific tax, a cents per litre, so these kinds of specific tax, which is the same as excise duties, they need to be adjusted by inflation, otherwise the real value of that tax will go down over time."
Axelson said that by not adjusting the fuel levy, Treasury would lose about R3.5 billion in revenue.
"The vast majority of the tax revenue increase is all on the personal income tax side. Around R16.7 billion of the R18 billion in increases is all on personal income tax."
While the finance minister is empowered through the Customs and Excise Act to implement an interim fuel levy adjustment by a notice in the gazette, Parliament can intervene to change the duration before it's formalised in the taxation act.

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EFF rejects fuel levy as an attack on the poor
EFF rejects fuel levy as an attack on the poor

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EFF rejects fuel levy as an attack on the poor

EFF treasurer-general Omphile Maotwe has written to Finance Minister Enoch Godogwana rejecting the fuel levy. Image: Nhlanhla Phillips / Independent Newspapers By: Omphile Maotwe On 21 May 2025, the Minister of Finance tabled the third version of the 2025/26 national budget. Instead of solutions to South Africa's deepening fiscal and social crisis, the Minister delivered a cold and calculated betrayal. He proposed an increase to the general fuel levy by 16 cents per litre for petrol and 15 cents for diesel. True to what the Economic Freedom Fighters (EFF) and the country has come to expect from the GNU led administration, the proposal was dishonestly framed as a 'regulatory adjustment' instead of a tax increase. This levy aims to recover R1.3 billion in revenue after the courts struck down the unlawful VAT increase that featured in the initial budget proposal. The EFF is clear that the fuel levy is not a regulatory tweak but rather a tax hike that is being unlawfully imposed through the Customs and Excise Act, instead of through the Money Bill Act, as mandated by section 77 of the Constitution. We reject this proposal precisely because it is illegal and anti-poor. Our Constitution empowers only parliament to impose a national tax through the money bill. The Minister should therefore not be using administrative regulation to introduce a tax increase. The levy is a tax, even the government's own Budget Review refers to this fuel levy increase as part of 'fuel taxes on petrol and diesel.' Proceeding with it in this manner will only serve to defy the constitution, undermine Parliament's authority, and rob South Africans of their right to participate in fiscal decisions that directly affect their lives. The judiciary was clear in its handling of the initially proposed VAT increase by the Minister. A 2% VAT increase was proposed which was brought down to 0.5% but ultimately through the work of the EFF, it was recognised as a tax measure implemented outside of the law by the judiciary and subsequently suspended. Yet here we are again with a Minister who is determined to continue to undermine parliament and the courts. As the EFF we recognise this as arrogance, contempt and a blatant disregard of the law. The economic consequences of this illegal fuel levy will be devastating. While R1.3 billion may seem insignificant to Treasury, its impact on the working class and ordinary people of this country will be economically challenging. Fuel costs are a direct driver of inflation in transport, food, and essential services. For a worker commuting daily, a student relying on taxis, or a small trader transporting goods, this increase is not abstract. It is an attack on their survival. Our country is facing an economic crisis. That much is clear but as the EFF we will always be the voice that shields the poor from carrying an economic burden that results from poor governance and mismanagement. The crisis was not created by our unemployed youth in Tembisa or the grandmother in Giyani. It was not created by the street vendor in Umlazi or the taxi driver in Mthatha. The crisis was created by the ANC government through corruption, mismanagement, and a neoliberal austerity agenda that punishes the poor and protects the rich. The EFF has taken decisive action regarding the fuel levy and on 26 May 2025, we wrote to the Speaker of the National Assembly and the Chairperson of the Standing Committee on Finance, demanding immediate parliamentary intervention. We called for the Minister of Finance to withdraw the proposed levy because it must be introduced through the Money Bill Act. We further urged the Finance Committee to place this matter on its agenda, summon the Minister to account, and reaffirm Parliament's constitutional authority over all revenue measures. This matter deserves urgent attention because if the levy is allowed to proceed in its illegal state, we run the risk of further legal challenges and collapsing the fiscal framework. No legitimate parliament would endorse a budget that is tainted by unlawful taxation. What is most alarming is that if the 2025/26 Budget is not adopted by 31 July as required by the Constitution, the government could face an administrative shutdown under section 21. The EFF however is not opposed to raising revenue legitimately. We support progressive taxation that will fund development, create much-needed jobs, and render services to our people. But taxation must be lawful, fair, and aimed at those with the most. The government needs to urgently impose a wealth tax, close corporate tax loopholes, and end illicit financial flows. Revenue can also be raised by scrapping the bailouts to failing state-owned entities but the EFF is against putting further strain on the poor and working class. Imposing a fuel levy is a political decision and must be recognised as such. The EFF will not be silenced or intimidated by political bullies who continue to disregard the law, due process and undermine parliament and our constitution. We stand ready to fight against the injustices that will emanate from this tax increase that is disguised as an adjustment. We will fight against it in the corridors of parliament, in the confines of the courtrooms, and ultimately on the streets and on the picket lines. We will challenge this decision because we recognise it for exactly what it is, a bid to squeeze the poor and continue to cushion the rich and politically connected. Parliament should not allow the fuel levy to proceed as it threatens to render our institutions irrelevant. The people of South Africa did not vote for a government that will govern without notice, and parliament should be at the forefront of protecting the people who have entrusted us to lead and represent them. We call on all progressive forces to demand accountability, consultation, and for parliament to reclaim its power. The time has come for parliament to decide if it will stand with the people of South Africa or bow down to an unaccountable executive. The EFF stands with the people. * Omphile Maotwe is the Treasurer General of the Economic Freedom Fighters and a Member of Parliament ** The views expressed do not necessarily reflect the views of IOL or Independent Media

Rule of Law: Judicial Accountability is Healthy for Democracy
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Rule of Law: Judicial Accountability is Healthy for Democracy

Protest: EFF leader Julius Malema led a march to the Constitutional Court demanding that President Cyril Ramaphosa be held accountable for the Phala Phala scandal. The question regarding the judiciary's independence is not so dissimilar to the former President Thabo Mbeki's reaction to the ANC's parliamentarians' vote to squash the establishment of a Multi-Party Committee to investigate whether President Ramaphosa has a case to answer on the Phala Phala farmgate scandal, says the writer. Prof. Sipho Seepe Umkhonto we Sizwe Party (MKP) argues that 'Members of Parliament are required to declare their assets; therefore, the same standards should apply to judges, who wield immense constitutional power and influence. Judges must be held to a higher standard of scrutiny and accountability. South Africa cannot afford to have a judiciary shielded from the same transparency expected of other arms of state.' The self-appointed guardians of our democracy would have none of it. 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It is not an accident that we have courts that foreground 'colonially borrowed languages; languages that are hardly understood by [their audience], and languages, which even these speakers handle with difficulty and grammatical inadequacies.' The sooner we demythologize members of the judiciary, the better for us. * Professor Sipho P. Seepe is an Higher Education & Strategy Consultant. ** The views expressed do not necessarily reflect the views of IOL, Independent Media or The African.

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Text Color White Black Red Green Blue Yellow Magenta Cyan Transparency Opaque Semi-Transparent Background Color Black White Red Green Blue Yellow Magenta Cyan Transparency Opaque Semi-Transparent Transparent Window Color Black White Red Green Blue Yellow Magenta Cyan Transparency Transparent Semi-Transparent Opaque Font Size 50% 75% 100% 125% 150% 175% 200% 300% 400% Text Edge Style None Raised Depressed Uniform Dropshadow Font Family Proportional Sans-Serif Monospace Sans-Serif Proportional Serif Monospace Serif Casual Script Small Caps Reset restore all settings to the default values Done Close Modal Dialog End of dialog window. Advertisement Next Stay Close ✕ 'I don't want to give oxygen to his name to be honest with you. He doesn't have the steam he may once have had and when those videos (were taken) of him singing that song 'Kill the Boer' there were massive crowds but he doesn't have that type of steam anymore'. 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