South African road agency that spent R37 million on manager salaries wants to introduce a new tax on motorists

The Road Accident Fund (RAF) is technically insolvent, yet it paid its top management team R37 million in 2025.

This was revealed in the state-owned entity’s latest annual report, which showed a breakdown of its personnel costs and performance rewards in the 2025 financial year.

The report showed that the RAF’s personnel expenditure over the last year was R2.468 billion, accounting for 62% of its total costs.

Basic salaries amounted to R1.786 billion, equating to an average salary of R742,000 per employee.

The RAF also paid its employees R232 million in performance rewards, constituting 13% of its total personnel costs.

However, one of the single largest costs was the RAF’s upper management team, which consists of 13 employees and was paid R37 million, including performance rewards of R8.2 million.

Collins Letsoalo, the former CEO of the Road Accident Fund, was paid R9.8 million in the 2025 financial year, including a bonus of R2.8 million.

Furthermore, the Standing Committee on Public Accounts (SCOPA) revealed that Letsoalo spent over R23 million on personal security for himself and his family between 2023 and 2025.

SCOPA member Alan Beesley criticised the former CEO, saying it was absurd that he had a private army protecting him and his wife.

Beesley pointed out that Letsoalo spent around R4.6 million on an armoured BMW X5 SUV for his security detail in 2024.

“The reality is that all South Africans have paid for this exorbitant amount through the fuel levy, and at a time when claim payouts have reduced to a trickle,” Beesley said.

SCOPA launched an inquiry into the RAF’s financial mismanagement in late 2024, ultimately leading to an SIU investigation.

Letsoalo was placed on special leave and was later suspended in June 2025. He challenged the suspension in the High Court, but the application was dismissed.

Transport Minister Barbara Creecy subsequently confirmed in August 2025 that Letsoalo’s contract had ended and he had left the RAF.

Massive salaries, technically insolvent, and a new tax for motorists

Motorists and civil action groups have expressed their disapproval of the RAF’s high salaries and bonuses, given its poor financial situation.

The agency has been technically insolvent for years. Its deficit increased from R25.5 billion to R27.8 billion over the last financial year.

The solvency ratio is 0.34:1, meaning the RAF holds only 34 cents in assets for every R1 of its liabilities. The current ratio is critically low at 0.33:1, reported NewsDay.

This is despite the fact that the entity receives over R45 billion in funding every year from the Road Accident Fund Levy, a tax placed on every litre of petrol and diesel sold in South Africa.

The government is currently exploring ways to increase the RAF’s revenue, though this move has been heavily criticised by political parties and the public.

The Democratic Alliance argued that motorists should not be forced to pay more for the RAF, stating that its poor finances are the result of severe mismanagement.

“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.”

It made these comments after Creecy revealed the Transport Department is looking to introduce a new tax linked to vehicle registration and licence disc renewals.

The department argued that this was necessary to support the RAF due to the rise of electric vehicles (EVs), which do not pay fuel taxes and therefore do not contribute to the entity.

Bear in mind that EVs currently represent a tiny fraction of the cars on South African roads and are not yet prevalent enough to make a meaningful dent in the RAF’s revenue.

Creecy said that the proposal is currently under review, and that its findings for the RAF’s new funding model will be publicly communicated once complete.

She added that the evaluation of the proposed funding options will likely be concluded during the 2026/2027 financial year.