The Organisation Undoing Tax Abuse (Outa) has said the time has come to pull the plug on etolls.

This follows on from Sanral’s financial results for the year ending March 2019 in which it’s made clear just how woeful the etoll situation is.

The financial results reveal that Sanral collected just R687.7 million in etolls. The value of expected loses on etoll trade and other receivables however, toppped out at R10.04 billion.

Naturally, Sanral is aware of the problems and sees just two solutions.

“The public entity’s funding stratergy for the next 12 months relating to toll operations is dependent on positive developments to resolve the etoll impasse and the public entity raising funding either from government grants or further borrowings,” wrote Sanral.

But Outa chief executive officer, Wayne Duvenage has a third option – scrap etolls.

“What was interesting in the past year, was that Sanral did not reflect their etoll revenue as being anything more than the R688m, which is what they actually realised in cash from the scheme,” says Duvenage.

“In prior years this was not the case and in the previous financial year ending March 2018, Sanral reflected their etoll revenue as R1,87bn, yet they only collected R726m, signaling that the difference of R974m was collectable. This tells us that SANRAL have now given up on chasing unpaid etoll debt, which is made more evident in their decision to halt the summonsing of etoll defaulters in March 2019,” adds the CEO.

What strikes us as odd is that Outa fails to acknowledge that Sanral adopted the IFRS 15 standard for reporting revenue from contracts with customers this year. This standard outlines when a contract with a customer may be reported in annual results. One of those stipulations is that the payment for said contract can definitely be collected and in the case of etolls, Sanral can’t guarantee that.

For this reason, revenue for firms that adopt this reporting standard will experience a noticeable dip. We noted this in Vodacom’s financial results earlier this year. Unlike Vodacom however, Sanral did not normalise revenue from previous years with this standard which is likely where the confusion has happened.

Once normalised, Sanral says revenue for etolls in 2018 amounted to R690 million compared to the R687 million collected this year. Of course, Sanral explains this in its financial results.

“The toll revenue disclosed above is the consideration amount which the entity expects to receive from customers (road users). The entity has determined the amount that is highly probable to meet the requirements of “what the entity expects to receive from customers at the time of recognition” considering the intention and ability of customers,” the organisation wrote.

But Duvenage believes that if the last 20 percent of customers stopped paying etolls, the scheme would die off.

“If the last 20% of road users still paying etolls decided to stop doing so, Government will be forced to announce the end of etolls sooner rather than later,” said the CEO.

Outa has been at this fight for over five years now and this is the umpteenth time it has called for etolls to be scrapped, perhaps this time it will happen but we’re not placing our bets just yet.

[Source – Outa]
Brendyn Lotz writes news, reviews, and opinion pieces for Hypertext. His interests include SMEs, innovation on the African continent, cybersecurity, blockchain, games, geek culture and YouTube.