Major diesel users in South Africa can expect significant changes as the government plans to overhaul the Diesel Refund Scheme.
The refund scheme was introduced in 2001, allowing qualifying users to claim back some or all of the General Fuel Levy (GFL) and Road Accident Fund (RAF) Levy on the diesel they purchase for certain primary production activities.
This programme is primarily aimed at businesses in the agricultural, fishing, mining, and transport industries, and is intended to help lower operating costs for high-volume diesel users.
However, the system has run into several issues. One of the main problems was that diesel refunds were linked to the VAT system, creating administrative burdens that many businesses struggled to meet.
Record-keeping requirements were another headache for users, as many claimants were unable to meet the South African Revenue Service’s (SARS) strict expectations for diesel logbooks.
This has led to valid claims being rejected because logbooks were incomplete or did not fully comply with the rules.
At the same time, the system lacked sufficient risk checks, allowing ineligible applicants to register and submit claims with little upfront verification, leading to fraud.
As a result, SARS announced in December 2025 that it will modernize the Diesel Refund Scheme to address these issues.
The new digital platform is meant to simplify the system for claimants while improving compliance.
One major change is that diesel refunds will now be processed on new platform, separate from VAT, under Schedule 6 of the Customs and Excise Act.
However, this does mean that current and eligible diesel users will be required to register on the new platform.
New Diesel Refund Scheme
Under the new scheme, claimants will be able to track the status of their refund applications in real time.
The system will also include automated checks and validations, which SARs claims will reduce errors, speed up processing, and improve traceability and oversight across the supply chain.
One of the main benefits for businesses is a simplified diesel logbook, which will be tailored to different types of entities and should reduce compliance hurdles.
SARS pledged to support businesses through the transition by hosting information sessions and providing guidance on each phase of the new system’s rollout.
The first information session took place on 27 November 2025, and more are set to follow in 2026.
Businesses that are eligible for the new Diesel Refund Scheme include on-land activities such as farming, mining, and forestry, as well as offshore and marine practices like commercial fishing, offshore mining, harbour vessels, research vessels, and all vessels operated by Portnet or used in bunker operations.
It is also available to rail freight operators using diesel locomotives, and electricity generation plants with a capacity of more than 200 megawatts.
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