New tax to pay for Road Accident Fund that spent R28 million on 16 suspended employees

The Road Accident Fund (RAF) spent R28.5 million on 16 employees suspended within the last two years in South Africa.

This was revealed by Transport Minister Barbara Creecy during a parliamentary Q&A, where she was asked about the total number of RAF employees currently on suspension, and the cost of salaries and other remuneration paid to them.

The RAF is a state-owned entity that functions as a national insurer to compensate victims of road-related accidents for injuries or a loss of income.

However, it has been facing financial challenges for years. It is technically insolvent and has been investigated for corruption and mismanagement.

National Assembly member Alan Beesley asked the minister about the total amount paid to each employee from the date of suspension to the latest date for which information is available.

Creecy replied that 16 RAF employees are currently on suspension, and that the total amount paid thus far is R28,542,304.

She added that the employees were suspended between May 2024 and July 2026; however, she did not provide an explanation for the suspensions.

The 16 individuals were suspended on the following dates:

• May 2024 – 1 employee
• August 2024 – 1 employee
• September 2024 – 1 employee
• November 2024 – 1 employee
• March 2025 – 1 employee
• November 2025 – 6 employees
• March 2026 – 2 employees
• July 2026 – 3 employees

Creecy further revealed that the salaries of the suspended employees ranged from R48,796 to R333,874 per month before tax.

The Special Investigating Unit previously found that the RAF colluded with criminal syndicates to pay out false claims.

The entity has also faced accusations that it attempted to hide money to avoid paying claims and legal fees, reported Newsday.

The government is attempting to turn the RAF around by suspending and investigating corrupt employees, but these individuals are still being paid.

“As per the requirements of the relevant labour legislation, all the suspensions are with pay pending the finalisation of the respective disciplinary processes,” explained Creecy.

New tax proposed to pay for the RAF

The RAF is funded by the Road Accident Fund Levy, an R2.15-per-litre tax levied on every litre of petrol and diesel sold in South Africa. It is the second-largest fuel tax after the General Fuel Levy.

This tax generates approximately R45 billion per year for the RAF, yet the fund is technically insolvent due to years of mismanagement.

Despite this, the Department of Transport announced earlier this year that it was considering a new tax to further support the RAF.

This tax would take the form of a new fee linked to vehicle registrations and licence disc renewals.

The stated reason for the tax is that a new source of revenue is needed to support the RAF due to the growing adoption of electric vehicles.

The department argued that, since EVs don’t consume fuel, they do not contribute to the RAF and that a new tax is needed to ensure all road users pay for the entity.

This proposal was heavily criticised by motorists and civil action groups, who argued that EV adoption is still years away from having a noticeable impact on the RAF.

Furthermore, they argued that the RAF’s financial problems are not due to a lack of funding, but corruption, and that the department should fix the entity before expecting motorists to pay any more.

Our sister publication MyBroadband recently asked the department whether work on the new funding model is ongoing and if the new tax is still on the cards, but didn’t receive a response.