Motorists pay R45 billion per year in petrol taxes – The government wants you to pay even more

South African motorists pay the Road Accident Fund (RAF) R45 billion per year through fuel taxes, yet the government wants to introduce a new tax to generate more revenue.

The Minister of Transport, Barbara Creecy, recently announced that her department plans to introduce a new tax for motorists renewing their vehicle licence discs.

This would take the form of a new mandatory fee attached to vehicle registrations and annual licence disc renewals.

This new fee is intended to generate additional revenue for the RAF, a state agency under the Department of Transport (DoT).

The RAF is funded by the Road Accident Fund Levy, a tax that adds R2.25 to every litre of petrol and diesel sold in South Africa.

Because its money is derived from a tax on fuel sales, the RAF’s funding is expected to drop as electric vehicle (EV) adoption continues to grow.

The DoT therefore believes it is necessary to introduce a new tax to capture revenue from all road users as households move away from combustion engine cars.

However, the tax proposal has been met with fierce opposition from motorists, industry stakeholders, and civil action groups, arguing that motorists already pay too much for the RAF.

The RAF exists to compensate victims for injuries or a loss of income resulting from vehicle-related accidents, but it has been run into the ground in recent years.

Despite receiving R45 billion per year in fuel taxes, the RAF is technically insolvent and has a massive backlog of compensation claims.

The entity has been mired in controversy, including reports of corruption and mismanagement. The former RAF CEO, Collins Letsoalo, was paid R9.8 million in the 2025 financial year, including a R3 million bonus, while dodging a subpoena issued by the Standing Committee on Public Accounts.

The RAF has a history of poor record-keeping, non-responsiveness of consultants, and delays in processing claims. It also frequently relies on expensive litigation to resolve claims.

What motorists are already paying

TopAuto examined the costs motorists are already paying in South Africa without the addition of the new tax, which the government has yet to elaborate on.

Starting with fuel taxes, the average car owner refuels roughly twice per month, and a typical family SUV like a Toyota Corolla Cross has a 47-litre tank.

This means the average motorist indirectly pays around R211.50 to the RAF every month when they refuel their car. Over a year, that adds up to R2,538 for a single car.

The other relevant cost to consider here is the vehicle licence disc renewal fee, since the proposed tax would be linked to this process.

The exact amount varies depending on the vehicle’s size and its province of registration, but sticking with our Corolla Cross example, a licence disc costs R600 to renew in Gauteng in 2026.

In other words, the Transport Department wants to add a new fee to a system that already charges motorists approximately R3,138 per year.

Backlash over new tax proposal

Earlier this month, the Democratic Alliance announced that it was already engaging the transport minister regarding her plans to replace the RAF through legislative amendment, and is currently awaiting a meeting.

The political party argued that vehicle owners are taxed enough and that the government should address core issues at the RAF to solve its financial issues instead of pouring more resources into an entity bleeding money.

“The RAF is not in crisis because motorists are not paying enough, the RAF is in crisis because years of mismanagement, corruption, waste and poor governance have left it financially crippled,” it said.

“South Africans should not be forced to foot the bill for the government’s failures.”

The DA argued that the RAF has become an unsustainable burden on taxpayers, and that it should be replaced with a new system.

“The solution is to fundamentally reform and ultimately replace the RAF with a sustainable, efficient and affordable system that delivers support to accident victims without continuously demanding more money from the public,” it said.

The CEO of the Automobile Association, Bobby Ramagwede, said the idea of a new tax to offset EV adoption and support the RAF was laughable.

“EV adoption is very slow. If one were to compare the rate of EV adoption versus the amount of money we’re haemorrhaging from the RAF, it’s abundantly clear that the issue is operational,” he said.

He questioned whether South Africa would be better off scrapping the RAF and introducing a mandatory third-party insurance policy.