The Gauteng government is stepping up efforts to recover millions in unpaid vehicle licence fees with the creation of a new debt collection unit tasked with tracking motorists who owe the province.
This move follows Gauteng MEC for Finance and Economic Development, Lebogang Maile, emphasising the need for strict fiscal discipline during his budget speech to the provincial legislature on Tuesday, where he outlined measures to strengthen revenue collection and safeguard the province’s finances.
Vehicle licence fees remain one of Gauteng’s largest sources of revenue, contributing more than 60% of internally generated income for the Department of Roads and Transport. Revenue from vehicle licensing grew from R4.5 billion in 2022/23 to R4.9 billion in 2023/24, largely due to improved collection of licence renewal fees.
The department collects this revenue through a network of agencies, including municipalities, the South African Post Office, the Road Traffic Management Corporation, and the Gautrain Management Agency, which are reimbursed from the funds they collect on the department’s behalf.
Maile underscored the immediate challenge faced by the Gauteng Provincial Treasury, stating that transforming budget priorities into funded programmes with defined responsibilities and measurable outcomes is critical for effective service delivery.
Delving deeper into the province's fiscal strategy, Maile introduced several reforms aimed at boosting revenue generation and collection.
He highlighted plans for the new debt collection unit, which will be instrumental in tracking down motor vehicle owners who owe outstanding debts to the province.
Maile stated that this initiative aligns with the exploration of significant income streams, namely through motor vehicle licence fees, and the gambling and liquor industries.
"With this legislative amendment, the Gauteng provincial government aims to tighten regulations by strengthening oversight, improving compliance, and monitoring automated gambling interventions.
"There are various other legislations that we are looking at, including the Gauteng Liquor Act. Furthermore, the Gauteng Legislature has finalised the appointment of the panel of debt collectors, whose primary role is to provide debt collection services to collect outstanding debt," he said.
The MEC said the new approach to fiscal management is rooted in an uncompromising commitment to seeing through infrastructure projects.
He warned that unfinished or delayed initiatives would not be tolerated under the new budgetary constraints.
"Our approach is simple. Finish what you have started. Pay for what is already committed and fund what unblocks service delivery. It is for this reason that the budget prioritisation logic has been framed around."
In recognition of the critical state of infrastructure, more than R36.4 billion has been allocated to address essential projects, including water supply, road maintenance, and school improvements.
Maile noted the pivotal role of municipalities as the frontline of service delivery, where residents turn first for essential services such as water, electricity, refuse removal, and recreation.
"In the national Budget, it was reiterated that infrastructure is the base for long-term growth, improved service delivery, and job creation. Government is shifting spending towards growth and fixing infrastructure."
He acknowledged the dire financial and operational distress faced by many municipalities, as highlighted in the national Budget, and reaffirmed the current budget’s support for municipalities in delivering bulk infrastructure.
"Municipalities are at the coal face of service delivery. They are the first point of contact with the government when residents need water, electricity, refuse removal, and recreation. It was announced in the national Budget that many municipalities are in financial and operational distress. This budget supports the efforts of municipalities to deliver bulk infrastructure," he added.
The MEC also sounded a warning about the growing pressure on the province’s R175.6 billion adjusted budget as demand for services continues to rise.
In light of the challenges, he revealed that the province is struggling to meet increasing needs driven by rapid population growth and an unemployment rate of about 33%, which is higher than the national average.
The Star
