NOTICE | Abuse of Power: Online Vehicle Registration Fees Include Huge Hidden Tax Hikes

Online transactions should be cheaper, not a hidden way for the state to generate revenue, writes Undoing Tax Abuse Organization (Outa) Wayne Duvenage.


Outa believes that the Road Traffic Management Corporation’s (RTMC) introduction of an online driver and vehicle licensing system is a welcome step into the digital age. However, we cannot accept the massive cost increases imposed on these services.

Andrea van Heerden, Senior Legal Project Manager at Outa, says: “Moving into the digital age and providing services through online portals is supposed to reduce costs for clients, not increase them.

“It’s great to say that you can now change ownership of your vehicle from the comfort of your home, but the cost of doing so has gone down from around R150 to R530, plus another courier charge of R99 rands, which is nothing but a scam and an unacceptable money-making scheme.”

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Imagine the outrage if the banking industry told its customers that online transactions would cost them 300% more than the fees charged if they came to the bank for their services. This behavior would spark customer outrage, as the efficiencies gained by moving to a digital space would not be passed on to the customer.

The question we have for the Minister of Transport is, “Why are you allowing RTMC to introduce massive service charges, which are essentially new ‘additional taxes’ for society, and pass them off as ” convenience fee “?”

We see this abuse of power creeping into many government departments, where services that society once received for free or at minimal cost are now turned into profit centers. This is particularly the case for the RTMC, the Road Traffic Infringement Agency (RTIA), the Driving License Card Account (DCLA), etc.

When these entities start generating excessive revenue streams, they find ways to spend that money. While CEO of RTIA, Japh Chuwe was allowed to increase his salary from an already high R3.3 million per year to R10.8 million in one year.

With massive increases in new revenue streams flowing to these public entities, they are finding creative ways to spend that money, essentially becoming new breeding grounds for more corruption and maladministration.

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Outa objected to these new “administration” fees proposed by the Department of Transportation in notices published last year. However, in the final version released in January, the department reduced the fees slightly. He forced these costs into the system without any explanation as to why these additional charges should be applied in the first place.

Online fees should not exceed office fees; instead, online fees should be significantly lower. This action by the RTMC and the Department of Transport goes completely against the spirit of what President Ramaphosa said in his State of the Nation Address in South Africa last week about the reduction regulatory burdens and bureaucracy.

“Digitalization should not be disguised as making it easier for society to deal with the state, then slap the public with service fee increases of 250% and more for that benefit. This is nothing less than a flagrant abuse of power and must not happen,” says Van Heerden.

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