Motor Vehicle Licence Fees Proposed To Increase By 3%

Statement by Donald Grant, Minister of Transport and Public Works

Today (27 March 2015), the Provincial Government Gazette will be publishing the draft regulations pertaining to motor vehicle licence (MVL) fee increases in the province. The draft regulations will be open for public comment for a period of 30 days. While we are not required by law, we have continued to publish these draft regulations for public comment so as to allow the over 1.7 million vehicle owners in the Western Cape the opportunity to submit their comments.

Last year, following a similar process of full public participation, proposed increases of an average 3.4% were implemented across the province. This year, the proposed fee increases amount to an average 3% increase for the Western Cape, which remains lower than the current inflation rate of 3.9%, recorded in February of 2015.

The Western Cape Provincial Government relies on vehicle licence fees to:

• Build, upgrade and maintain the provincially-owned road network.
• Assist municipalities to fund the maintenance of their more strategic roads.
• Continue to reduce the maintenance backlog, which has been decreased by 16.2% over the last six years.

These fees, along with budgetary allocations, help keep the Province’s roads in a condition significantly above that of other provinces, with many visitors to this province attesting to this freely and frequently. Of the total surfaced road network in the Western Cape, 89% are classified as being in a fair to very good condition, while 91% of all kilometres travelled in this province are on fair to very good roads. Our roads are an asset with an approximate value of R68 billion and they are consumed, over time, by the over 1.7 million vehicle owners in the Western Cape and other users

National Treasury Regulation 7.3.1 requires that all fees that are not or cannot be fixed by any law and that relate to revenue accruing to the revenue fund must be reviewed annually and submitted to the Cabinet via the Provincial Treasury.

During the period 2001 to 2005/06, the Western Cape increased it licence fees dramatically by an average of 10% over 5 years, which led to this province having the highest licence fees in most classes of vehicles and trailers in the country.

By the 2006/2007 financial year, motor vehicle registration and licence fees in the Western Cape Province were on average 50% higher than that of other provinces.

In addition to the burden placed on ordinary motorists, this also caused many truck owners to register their vehicles in adjoining provinces where fees were lower, thus significantly reducing Western Cape revenues.

Accordingly, the Western Cape did not increase its motor vehicle registration and licence fees between 2006 until 2013, while other provinces have increased theirs during the same period.

As a result our vehicles licence fees for sedans and light vehicles have come broadly into line with these fees in other provinces, while our heavy tare truck and trailer rates are in many cases significantly lower than those in neighbouring provinces.

The draft regulations will be published in the Provincial Gazette Extraordinary 7372 dated 27 March 2015 for public comment for a period of four weeks. The closing date for comment is Friday, 24 April 2015.

The draft regulations proposing the new motor vehicle registration and licence fees, as well as other information, will be available on the website.

All comments can be submitted to:

Head of Department
Attention: Mr R Barreiro
Western Cape Government Transport and Public Works
PO Box 2603
Cape Town
8000

Email: Randal.Barreiro@westerncape.gov.za

Fax: (021) 483 7112