13 January 1999
A levy of 1.5 cents per litre will be applied on the sale of all aviation fuel, with effect from 12 January 1999, the Chief Executive Officer of the South African Civil Aviation Authority, Mr Trevor Abrahams, announced today.
The Civil Aviation Authority (CAA) was established on 01 October as a safety- regulatory body responsible for the regulation and promotion of civil aviation safety and security. The Authority operates at arms-length from Government and is funded by a combination of user charges, levies and Government funding for services which the CAA performs on its behalf. In addition, to aid the establishment of the CAA, a Government subsidy will be made available for the first three years of its operation.
Section 2 of the South African Civil Aviation Authority's Levies Act, (Act No 41 of 1998) enables the CAA to make a determination regarding the application of a levy. The purpose of applying a levy is to fund the Authority for those activities which are not directly attributable to any specific user or product but which benefit the industry as a whole, such as the promotion of aviation safety.
In accordance with the Levies Act, the levy determination made by the CAA has been approved by the Minister of Transport and the Minister of Finance and was published in the Government Gazette on 14 December 1998.
"A fuel levy was considered the fairest option as it can be applied to all operating sectors of the industry. In addition, the levy is directly proportional to participation in aviation activities," Mr Abrahams said.
The CAA has consulted with industry regarding the fuel levy. Industry views on the levy are divided. However, the major users, representing approximately 90% of consumption of aviation fuel, are supportive.
The levy is charged on sales of aviation fuel by wholesale distributors, which pay the CAA thirty days in arrears. This system will be administered by the Central Energy Fund.