Why Sanral charges VAT on e-tolls

(Shutterstock)
(Shutterstock)
Cape Town - E-toll is not a tax, but a user charge, according to Vusi Mona, general manager: communications at the South African National Roads Agency (Sanral).

He responded to a query by a Fin24 user on why Sanral is charging VAT on e-tolls.

"That is the same as charging VAT on your rates and legally there is no such thing as a tax on tax," the user wrote.

"So, I would assume that an e-toll is not a tax, but a money making business, designed to extract as much money as possible from people, who earn enough to purchase a vehicle."

Mona told Fin24 that Sanral is a non-profit based organisation and an agency of the department of transport.

"The toll revenue is mainly applied to pay for road infrastructure upgrades and expansions, which were completed in 2010/11 and commenced in early 2008, as well as the repayment of the debt which was incurred to fund this enormous project," said Mona.

"Toll infrastructure is an insignificant cost in relation to the road expenditure incurred, which is to the benefit of all its users."
 
He said during an evaluation process on the e-toll financial model by two independent auditing firms, it was  found that the e-toll financial model is a zero profit model.

"ETC, the operator of the e-toll system, is paid for services rendered as per their tendered rates," said Mona.

"Sanral and its operator are audited in order to ensure that all procurements and payments are done in accordance with the law."


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