Roadblocks and Your Rights

“Roadblocks and Your Rights” featured on the Carte Blanche website on 20 August 2017 provides useful insight into:

  • The two kinds of roadblock
  • What cops are legally allowed to do
  • What happens if you have outstanding fines
  • Under what conditions arrests are allowed
  • What to do if you feel unsafe
  • Can you film the police?
  • Can you ask for identification?

Read the full article here:
https://carteblanche.dstv.com/roadblocks-and-your-rights/

New Accounting Standards – substantial impact for Car Rental and Leasing Companies

IFRS 16 Leases, the new international accounting standard, will come into effect from 1 January 2019.  This will have a substantial impact on car rental and leasing companies.

During a presentation to SAVRALA members by accounting firm Deloitte Touche, Trevor Derwin, A & A Partner in the Johannesburg office explained that the essence of the changes lies in the accounting treatment applied by lessees. At present, the costs pertaining to leased vehicles are not reflected on the balance sheet; in the future all leases will have to be reflected on the balance sheet, with the exception of short term leases (less than 12 months) or low value leases.

“There are a number of considerations to take into account for companies who have lease agreements” said Derwin.  “These include the impact on the company’s financial report, key ratios, disclosures, the cost of implementation, the ability to access desired information, the impact of covenants and debt renegotiations and leasing strategies. It is essential that these companies start discussions with their bankers, analysts and lessor companies to ensure they are ready to implement the new standards.

“However, there will be no difference to the bottom line for leasing and rental companies,” he added.  “Despite the changes, there remains considerable advantages to leasing as opposed to buying vehicles.”

The main changes required by the new standards include the accounting treatment for lessees in a lease (where most leases will be brought on balance sheet as finance leases), the definition of a lease and enhanced disclosures.

Under the new standards, a contract contains a lease if it depends on the use of an identified asset and if it conveys the right to control the use of such an asset.   Further, the customer must enjoy substantially all of the economic benefits from the use of the asset during the lease term. In determining whether a customer has the right to control an asset, the customer must be able to determine how and for what purpose the asset is used.

A further consideration lies in substantive substitution rights.  In this instance, if the supplier has the practical ability to substitute alternative assets, and the supplier benefits economically from this right, the contract would no longer be considered a lease.

Many lease contracts today include both a lease and service component. Under the new standard these should be accounted for as separate components with the lease element capitalized to the on balance sheet lease, while the service component is expensed as incurred. Lessees may, however, elect to not separate non-lease components from lease components by class of asset.

“Identifying a lease will sometimes require a significant amount of judgment based on the elements of the definition of a lease” said Derwin.  “It is also important to determine the lease term, ie whether it is reasonably certain that an extension or termination option will be exercised.  In addition, identifying the appropriate rate to discount the lease payments will require significant consultation.”

“Although the new standards come into effect in January 2019, they will apply equally to existing as well to new lease arrangements,” he concluded.   “For those SAVRALA members who play the role of lessor, there is a business opportunity in that they can assist their customers to find the best solution.   We urge all your members, lessors and lessees alike, to discuss these changes with their auditors to ensure they are informed and ready to implement they changes as they come through”.

Download the PDF of the July 2017 presentation by Trevor Derwin:
IFRS 16 Leases – Technical Update

SAVRALA General Manager unable to renew contract

PRESS RELEASE: February 01, 2013

SAVRALA General Manager unable to renew contract

Regrettably the Southern African Vehicle Rental and Leasing Association (SAVRALA) wishes to announce that its current General Manager, Mr Wayne Duvenage, having agreed to join the body on a six month contract last year, has advised that he is unable to offer his valuable services to the car rental industry after his contract expires at the end of February 2013.

Wayne has had a distinguished career in the car rental industry that spans almost 20 years. SAVRALA wishes him well in his future endeavours.

Editorial contacts: ADZOO – Manfred Noriskin-Ender 0829010342

NOW FOR ANOTHER TAX ON MOTORISTS & FLEETS – TYRES

It goes without saying that the REDISA (Recycling and Economic Development Initiative of SA) levy on tyres, indicated at R2.30 for every kilogram of tyre purchased, is another tax on the motorist and transport industry in SA. The reason, we are told, is to introduce a tyre recycling initiative which will (a) create jobs and (b) reduce waste tyres piling up in the environment, both of which are great reasons on the face of it, but what lies behind the plan?

First of all, there is a cost to the road user. Secondly, the Retail Motor Industry body (RMI) have lodged a legal challenge to the plan saying this was initially devised by the industry by their Tyre Dealers association and was then ‘hijacked’ by a previous industry employee to manage the process through a new organisation. More worrying is the fact that this is a regulated (government backed) levy, being passed on to a private organisation, to manage a process which does not have the support of the tyre industry association.

There is a view that recycling initiatives of this nature should be self-funding i.e. no add-on cost to the consumer. That the recycling of tyre should be a free standing business venture and that market forces should be allowed to play out. So why has this not been the case to date? Surely there is a business case and need for content (in whichever shape or form) of used tyre product? And if so, what will happen when a new tyre recycling organisation approaches the tyre dealers to ‘take their used tyres for recycling at zero cost (i.e. no levy)’? Will this compel the tyre dealer to save costs for the consumer and break the law by refusing to participate in the government regulated plan?

SAVRALA raises its concern when regulations do not have the backing of industry and urges alternate / more appropriate mechanisms be sought through deeper engagement by all involved. Top of mind should always be the consumer and the solutions sought, should ultimately not cost the overstretched tax payer one Rand more, lest this be seen as another tax (al-la-plastic bags) that will probably defeat the purpose for which it is intended, with a handful of participants getting rich at the expense of the road user.

Keri Kirsten
SAVRALA President

ALLIANCE FORMED IN OPPOSITION TO URBAN TOLLING

Press release issued 14-03-2012

ALLIANCE FORMED IN OPPOSITION TO URBAN TOLLING

Following anger and outrage against the e-Tolling of Gauteng’s freeways, an alliance has been formed to coordinate the strategies of a number of organisations and associations who share a common view about this unjust action.

Numerous organisations have been strongly opposing the e-toll program from various channels, yet a unified platform has been lacking to share and combine the efforts of business. The launch of OUTA (Opposition to Urban Tolling Alliance) will be this platform and will provide a united front which will lend significant support to the cause.

The web site URL for the Opposition to Urban Tolling Alliance (OUTA) is www.outa.co.za.  It is a concise informative portal and one that also allows organisations to sign up and display their support accordingly.  It will be dynamic and updated regularly.  In addition, individuals can also lend their support on the “support us” page as well as link through to the OUTA Facebook page to express their concerns, comments and views.

While there are a number of electronic petitions and web sites denouncing e-tolling in Gauteng (and these are all very necessary in their respective efforts), the OUTA platform is one that will provide clarity around the misleading and ambiguous statements and questions about e-tolling. The public and organisations have a desire and a right to know much more than that which has been ‘fed’ to them by the authorities.  The OUTA.co.za web site will also be the platform that provides updates of the legal challenge when this is lodged.

OUTA encourages organizations and the public view the site and sign up.
SUBMITTED BY SAVRALA

SAVRALA REFUTES REDUCED TOLL FEES

Press release issued 23-02-2012

SAVRALA REFUTES REDUCED TOLL FEES

Following the Finance Minister Pravin Gordhan’s reference to reduced toll fees for the Gauteng’s Freeway Improvements (GFIP), the South African Vehicle Renting and Leasing Association (SAVRALA) is adamant that “this funding mechanism is inefficient, impractical and unacceptable” says Wayne Duvenage, vice president of SAVRALA.  “We salute the Minister for apportioning R5,8bn of our taxes toward the GFIP, but ask why stop at a quarter of the amount required, especially in light of the extra 20c added to the fuel levy?”

It is incorrect to assume that because the improved freeways will reduce congestion, save costs and improve safety, we must now accept the funding thereof to be conducted through a complicated, inefficient and extremely costly process.  The GFIP urban tolling plan has been ill-conceived and thrust upon the Gauteng road user with minimal consultation or consideration to its impact.  It’s not about the fee. Even at 10c per kilometre, it is the principal of tolling our urban daily routes to work and back that is wrong. The implementation of an efficient road infrastructure is one of the roles of Government, and they are tasked to do this in the most efficient manner possible for its citizens.

More frustrating is the double whammy of the additional 20c to fuel levy.  The current R1.77c fuel levy will increase to just under R2 per litre from April.  This will secure around R27bn per annum going forward.  Combine this with the existing long distance toll revenues, local licence fees and some input from the national treasury pot (yes, it’s not strange to expect some of our general taxes to contribute toward roads) and you have sufficient funding for our national road infrastructure upgrading and maintenance, if the money is spent wisely.

The fuel levy is the most efficient and equitable user-pay principle, which, when applied ensures that all road users contribute to all our roads in direct proportion of their usage.  Every time one fills a tank with fuel, they contribute approximately R140 toward the maintaining and building an efficient road system. To toll the GFIP suggests that all road upgrades in future should be tolled – unless SANRAL plans to be inconsistent with this principle.  Does one detect a quandary in the making?

Why on earth would Gauteng citizens want or need to pay an additional R1,6bn per annum to manage the collection of these funds when the fuel levy can be applied almost free of administration costs?  Gauteng citizens more than pay their way toward the total tax basket of the country’s economy and yet receive much less in return. To now burden this economic hub with a cumbersome, expensive and inefficient urban toll system is immoral and blatantly wrong.

It is also wrong to assume that because the gantries are built, there is no turning back.  To press on with tolling our urban roads will be throwing good money after bad. There is a far more viable alternative and SAVRALA, along with a number of other business associations will now seriously consider a joint legal challenge against this process.  Initial consultations have revealed significant transgressions of the law and the constitutional rights of the public in this regard.

Editorial contact: Paul Pauwen 083 250 0333 (www.savrala.co.za)

 

SAVRALA ENCOURAGED BY E-TOLLING DELAY

 Release date: 13-01-12

SAVRALA ENCOURAGED BY E-TOLLING DELAY

Southern Africa Vehicle Rental and Leasing Associations (SAVRALA) is encouraged by today’s announcement by the new South African National Roads Agency Limited (SANRAL) Board to apply its mind to the serious concerns raised by the great range of both local and national stakeholders who have opposed the current GFIP eTolling implementation plan which is now delayed. SAVRALA would welcome any opportunity to present its concerns to the new Board and have a constructive discussion about the funding of the Gauteng Freeway Improvement Project (GFIP). SAVRALA looks forward to further updates on this development and in particular the applicable timelines.

At a special SAVRALA members meeting yesterday, it was agreed that the Association would continue to oppose the current GFIP eTolling implementation plan and, if necessary, take legal action. The members confirmed that they were not unwilling to pay for the GFIP (or other road) improvements but wanted a more cost efficient funding model which the national fuel levy presents.

Further SAVRALA believes that only a very small number of about 20,000 Gauteng public road users are included in the reported 213,000 etags registered with SANRAL to date. It believes that the very large majority of etags may be held by financial institutions and a few mid-sized corporates, however, SAVRALA awaits further detail from SANRAL in this regard. It is, however, obvious that the general public, despite the expensive SANRAL marketing campaign, have given a clear signal to SANRAL that it rejects its eToll plans.

SAVRALA also believes the current investments in etags, infrastructure, staff and vehicles need not go to waste. Should the new SANRAL Board recommend to the Minister of Transport that the national Fuel Levy be used for the immediate SANRAL funding requirements, the current GFIP Open Road Tolling (ORT) infrastructure and etags, for example, could be used to assist in several Gauteng pilot projects to help better manage the current traffic violation process and even the pre-payment of vehicle license discs. We should look to try and utilize the available technology in a more value adding and innovative manner.

SAVRALA hopes that the very contentious GFIP funding debate can be resolved quickly, without any legal action, so that the momentum and energy now mobilized by the broad range of interested parties on tolling can be refocused on tackling the unacceptable loss of life on our roads. We need to all work together to ensure that South Africa meets its Decade of Action for Road Safety 2011-2020 commitments and reduce the carnage on our roads.

Editorial contacts:

Paul Pauwen

Email: manager@savrala.co.za

NO TO OPEN ROAD TOLLING – GAUTENG PAYS MORE THAN ITS FAIR SHARE (Synopsis)

Release date: 12-01-12

NO TO OPEN ROAD TOLLING – GAUTENG PAYS MORE THAN ITS FAIR SHARE

The Medium–Term Budget Policy Statement in October 2011 expressed Governments clear intention to now focus on national infrastructural spend over the next three years by allocating just over R800bn.

In this context, on 18 April 2011, the Minister of Transport Mr. Sbu Ndebele launched the S’hamba Sonke – ‘Moving Together’ Programme. R22bn was allocated to this programme in last year’s Medium Term Expenditure Framework (MTEF) cycle and was described as ‘the Department of Transport launching a new roads upgrade and maintenance initiative to fix and upgrade the entire secondary roads network of South Africa’.

The earlier call for ‘a collective engagement of thoughts, ideas and alternatives in construction and funding methodologies’ was followed, by an announcement less than a month later, ahead of the final stakeholder consultation meeting, that toll tariff recommendations would now be presented to both the Minister of Transport and Finance.

Unlike the S’hamba Sonke Programme, the GFIP program will follow the ‘user-pay principle (tolling) to repay the loans and will be used for future operation and maintenance of these roads’.

This highlights the inconsistency and almost subjective nature of the ‘user-pay’ principle which was undermined further by the exemption of certain minibus taxis and commuter buses by the Minister of Transport late last year.

Gauteng roads users were advised that they will now have to finance the costs for both the estimated R23bn construction costs for the Gauteng Freeway Improvement Project (GFIP) Phase 1a and a further R6bn (over five years) for the administration of the Open Road Tolling system (ORT).

Under the veil of Public Private Partnerships (PPP), the plans to implement a national ORT structure seems like another finance scheme to help Government source much needed funds despite the fact that road users already pay for vehicle license fees, drivers license fees, multiple fuel levies (incl the RAF and Transnet fuel pipeline) and carbon taxes, excluding the personal income tax contributions which go to the central fiscus, to fund the operation of Government which, many would argue, includes all roads.

The majority of the opposition to ORT, which includes a cross section of society including business (e.g.: Business Unity South Africa, Road Freight Association and Automobile Association) unions (more notably COSATU), civil society groups (e.g.: South African National Consumer Union), opposition politicians and indeed some within Government (e.g.: Deputy Minister for Transport, Jeremy Cronin), have called for the total suspension of the ORT project.

All acknowledge the need for significant road improvements, as one tool to deal with modern day city traffic congestion; however, the funding of such projects remains the key missing piece to the national transport puzzle.

The parties opposing ORT (excluding most of Government) are unanimous about the need to consider more seriously the national fuel levy as an exponentially more administratively efficient method of both collection and funding. SANRAL’s own research conducted by the Graduate School of Business in Cape Town concedes that ‘paying for roads through taxes or a dedicated fuel levy is simply cheaper than imposing tolls on a road even if this is through an ORT system. The cost of collection is far lower because it does not incur the cost of the toll collection system’. In terms of efficiency, as a benchmark, SARS’s cost of revenue collection is just over 1% unlike the proposed ORT collection process which is expected to be around 35%.

Accepting the fuel levy as a funding option some suggest that only Gauteng road users should pay an additional fuel levy to fund GFIP. It can be very strongly argued that Gauteng road users already contribute significantly more to the national funding of the operation of Government and by implication, all other provinces, than what it receives back to fund Gauteng’s own needs.

Using various reasonable assumptions, Gauteng contributes approximately R260bn (39%), via SARS, to the central fiscus at Government.

If one assumes that each region gets a proportionate benefit from the National Departments, then the next big consideration is the Provincial allocations. Including conditional grants of R14,5bn, Gauteng will receive a total of approximately R65bn (18%) during 2010/11 in stark contrast to the estimated R260,834bn, contributed by the province to SARS.

Consolidating all revenues, Gauteng Provincial Government is budgeting to spend only R6,2bn (9.2%) on Roads and Transport in 2011/12, a far cry from the R9,4 bn (18%) spent in 2008/09. A reduction of R3,2bn for roads and transport in three years despite the growing needs.

At the end of the day, the national interest is not served by revenue raised in a province being ring-fenced and kept within that province for their own hospitals, schools, transport (incl roads) etc. Rather National Projects like GFIP and other national projects under SANRAL could be and should be paid nationally via an additional cost allocation from the fuel levy by all road users.

In summary, Gauteng residents and road users already contribute both 44% of the total national fuel levy generated and significantly more, at an estimated R261bn (39%), to the central fiscus via SARS compared to the approximate R65bn it receives back from central Government.  Gauteng pays more than its fair share.

Editorial contacts:

Paul Pauwen

Email: manager@savrala.co.za