Minister of Transport Barbara Creecy has confirmed that the government is working on a new funding model for the Road Accident Fund (RAF).
This was confirmed in response to a question in the National Assembly about potential changes to the RAF’s funding framework.
Creecy said there was merit in a separate mandatory RAF fee, which would be tied to vehicle registrations and licence disc renewals.
The Department of Transport (DoT) has stated that there is a need to introduce a new source of revenue for the RAF to account for the growing popularity of electric vehicles (EVs).
The RAF is currently funded by the Road Accident Fund Levy, a tax placed on every litre of petrol and diesel sold in South Africa.
Since EVs do not consume fuel, they do not pay the levy and, therefore, do not contribute to the RAF.
Because of this, the DoT argues that a new vehicle-linked transitional levy is needed to capture revenue from all road users.
However, the announcement has been heavily criticised by motorists, industry stakeholders, and political parties.
The Democratic Alliance slammed the proposal, stating that motorists are already burdened by excessive taxes, high fuel prices, and the rising cost of living.
It also argued that motorists should not be forced to pay even more for the RAF, an entity that has been severely mismanaged and is hundreds of billions of rands in debt despite receiving R45 billion per year from the RAF Levy.
“Instead of fixing the RAF’s long-standing failures, the government is asking hardworking South Africans to pay more,” said the DA.
“The RAF is not in crisis because motorists are not paying enough. It is in crisis because of years of mismanagement, corruption, waste, and poor governance.”
The political party said it was engaging with Creecy regarding plans to replace the RAF through a legislative amendment, and that it was awaiting her confirmation of a meeting.
New funding models for the RAF
Member of Parliament, Makashule Gana, recently asked Creecy about the alternative funding models the DoT has considered for the RAF.
He also asked for details about the extra fee being added to car licence disc renewals, and the dates that her department intends to finalize its new funding model by.
Creecy said that the DoT and the RAF have initiated a structured review of the RAF’s funding framework.
“Once this process is completed, it will be communicated publicly,” she said.
She added that the evaluation of the proposed funding options will likely be concluded during the 2026/2027 financial year.
The preferred model will then be presented for further policy, legislative, and stakeholder processes.
“As part of the assessment, the proposed model must be designed to ensure it is equitable, sustainable and appropriate for the South African context,” said the minister.
She noted that this was necessary to ensure that there were no unintended disparities across categories of vehicle users.
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