Fuel levy increase amid VAT scrapping, 'robbing Peter to pay Paul'

THE National Treasury has been accused of fooling taxpayers by proposing an inflation-related increase in the fuel levy as a replacement for the now-scrapped VAT hike.

- MAYIBONGWE MAQHINA

During a joint meeting of parliamentary committees on finance and appropriations on Friday, where Finance Minister Enoch Godongwana and the National Treasury unpacked the 2025/26 Budget, MPs maintained that the fuel levy increase would negatively impact poor households amid questions about whose idea it was.

The fuel levy was increased as one of the new tax measures aimed to raise R20 billion after the VAT hike, which was to generate R75 billion, was scrapped. EFF MP Omphile Maotwe said they rejected the fuel levy.

"When we rejected VAT in March, we never said it must be replaced with a fuel levy. That is what the Treasury did, they just went to convert VAT to a fuel levy. What is more painful is that the increase of 16 cents per litre for petrol and 15 cents for diesel is only expected to generate R4 billion you are saying that yourself," Maotwe said.