Western Cape is to investigate the viability of imposing hospitality and commercial property development levies as a way of generating development funds for the province, premier Ebrahim Rasool said at the weekend.

The additional income is expected to offset the pressures which escalating social spending is placing on the provincial economic development budget.

Rasool said he would call for studies into the feasibility of these new levies next year for possible introduction should national government approve in about three years' time.

Already the province has applied to the national treasury for the go-ahead to charge a fuel levy of 10c/l on motorists, which will raise about R300m for road, rail and other economic infrastructure maintenance.

If the province gets the green light, the levy will probably be imposed towards the end of next year, Rasool said in an interview.

A 10% levy on commercial property development would raise about R250m annually on this year's provincial development projects of about R2,5bn for social housing and property development in under-serviced areas, Rasool said.

A hospitality levy could raise about R100m annually for use in training and marketing of Western Cape's tourism industry.

"If tourism is to become the lifeblood of the future Western Cape economy, then it needs marketing, training for service excellence and empowerment to diversify ownership," Rasool said.

Canada has a 20% development levy, and Ireland and Malaysia have similar taxes.

The Canadians, Rasool found on a recent visit, apportioned fixed percentages of the funds raised to specific purposes such as social projects, arts, culture and small business promotion.

The premier said having additional levy income would allow the provincial government to play a greater role in the development of the province's economy.

He has in the past called for a redefinition of the provinces' role. Rasool would like to see the creation of more fiscal room to allow the provincial government to make strategic interventions to save jobs and open up the "knowledge economy", so they are not simply the social agents for the disbursement of health, welfare and education spending.

"We feel ourselves constrained in this regard. We are not waiting for a conferral of roles or powers from government. We are asking for greater discretion over budget reallocations to make the kind of hard choices that build a sustainable future," he said.

Business Day