LTA under scrutiny – Labour will scrap Road User Levy

  • 31st March 2014
  • 2014
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Fiji Labour Party will scrap the Road User Levy and revise the unreasonably high fees, charges and penalties imposed on vehicle owners and drivers today. 

Owning a car is no longer considered a luxury in modern society. Yet, in Fiji the cost of maintaining a vehicle is fast becoming prohibitive with the regime extracting a heavy toll through various fees and charges.

The cost of registering, licensing and insuring a vehicle has gone up astronomically in the past three or four years with increases in fees and  hidden surcharges levied by the regime.

This is quite apart from the harassment motorists are subjected to from officials of the Land Transport Authority and the unreasonably high penalties LTA extracts even for quite minor offences.

First, let’s look at the cost of fuel – diesel and motor spirit- to see how much accrues to the State in duties and taxes. On every litre of motor spirit, Customs Duty is 46c which includes a Green Tax of 2c a litre. In addition,  15% VAT is charged on the wholesale price of the fuel. This means that on the current price to the motorist of $2.59 a litre for unleaded fuel, 69c goes to government in taxes. 

This is unjustifiably high considering that the motorist is required to pay an exorbitant Road User Levy. A 15% Vat is now added on insurance premiums, including Third Party insurance policies, as well as other fees and charges which have been introduced or have escalated in the past 3-4 years. 

FLP believes among the most iniquitous of all taxes and levies for motorists  is the Road User Levy introduced in the 2009 Budget. It was expected to raise $15m annually for infrastructure rehabilitation. 

In the years since 2009, Fiji’s roads, particularly in rural areas, have deteriorated markedly and people are justified in asking what is happening to the millions of dollars raised each year through the Road User Levy. With the Bainimarama Administration’s failure to provide financial statements and accounts, there is no accountability for this Levy as much of our roading system remains in a deplorable condition with huge pot holes and crumbling foundation.

The Road Levy is based on the engine capacity of the vehicle. It ranges from  $75.00 for 2000cc vehicles and farm tractors to $325 for a 7-ton cane truck. 

Registering a vehicle and getting a Certificate of Fitness (COF) will cost upwards of $300 per annum. This includes the Road Levy, annual registration fee of $120 and more, and $50 for COF. Third Party Policy costs $127 (more on this later).

Annual registration cost for a cane lorry is a highly costly affair at about $1000.  Still on the farming sector, the cost of Third Party Policy for a tractor has gone up 300% from $15 to $45 since 2009. 

Under this regime, Third Party insurance policies are now subjected to 15% VAT surcharge. This has pushed up the cost of Third Party policies.  Comprehensive policies also carry the 15% VAT plus Stamp Duty which has increased 300% in the past few years.  

This means that on a $100,000 4-wheel drive vehicle total premium would be $3600 per year. Of this, $3000 goes to the insurance company and $600 to the State –  comprising $150 in Stamp Duty (up from $50) and $450 VAT. 

Not satisfied with fleecing off motorists through every imaginable fees and charges, the regime has unleashed the Land Trust Authority on them to police, penalize and terrorise drivers, through harassment and unjustifiable penalties. 

LTA fees and charges are unreasonably high and urgently in need of a downward revision. LTA also needs an attitudinal change. It was created to assist motorists and keep our roads safe. But has, instead, become a penal institution with its culture of harassment and policing. 

LTA has also earned the unsavoury reputation of becoming just a money-making agency. The reduction of speed limits on trunk routes such as the Suva-Nausori highway to an unreasonably low 50km per hour except perhaps in heavily settled zones and where there are schools, is no doubt designed to catch “speeding” motorists.      

The Fiji Labour Party intends to carry out a comprehensive review of the Land Transport Authority and its operations and all fees and charges which place an intolerable burden on vehicles owners. 

Mahendra Chaudhry

27 March 2014