The Road Accident Fund (RAF) is exploring new avenues to generate revenue, including a fuel levy hike and a new tax on vehicle registrations and licence disc renewals.
This was detailed in the RAF’s annual report for 2025/26, where it noted that its current funding model has been affected by reduced fuel sales and a static levy.
Funding for the entity comes from the RAF Levy, which is a tax applied to every litre of petrol and diesel sold in South Africa.
The levy currently adds R2.25 per litre to the cost of both fuels, following a 7c per litre hike earlier this year.
It was previously set at R2.18 per litre. While the tax is usually adjusted for inflation, it had been frozen since 2021/22 due to the COVID-19 pandemic.
The RAF argued that the levy has not kept up with inflation and that its revenue has declined as a result.
“The RAF has not received an increase in the fuel levy over the past five years. During the same period, inflation continued to erode the Fund’s real income,” it said.
Its total revenue dropped by 5% over the last year, decreasing from R50.8 billion in 2024/25 to R48.1 billion in 2025/26.
Additionally, the RAF noted that fuel sales have declined due to the high prices brought on by the war in the Middle East
The technically insolvent entity is therefore looking for ways to generate additional revenue, including a new tax for vehicle owners.
Mandatory fee on licence disc renewals
The idea to implement a new fee on car registrations and licence disc renewals was first proposed by Transport Minister Barbara Creecy in May 2026.
Originally, the RAF said that this was necessary to offset the growing adoption of electric vehicles, which do not use fuel and therefore do not contribute to the RAF Levy.
However, the Department of Transport did not clarify how much this fee would cost, or if it would be applied to all car owners in South Africa, including petrol and diesel users who already pay the fuel levy.
The proposal has since been expanded to include a levy on all foreign-registered motor vehicles entering South Africa.
This is not a new phenomenon in Southern Africa, as Botswana requires vehicles from other countries to pay between R50 and R60 per visit for its Road Fund Tax, and another R50 to R60 for compulsory third-party insurance for 90 days, according to MyBroadband.
Another way the RAF wants to boost its revenue is to increase the RAF Levy from R2.25 per litre to R3.00 per litre, a 33% increase.
The state-owned entity claimed in its 2025/26 report that it is under-capitalized with its liabilities exceeding its assets by R439.5 billion.
While the RAF blames inflation, lower fuel sales, and the rise of EVs for its financial issues, the Special Investigating Unit (SIU) found that the RAF has been severely mismanaged for several years.
The SIU flagged irregularities in procurement procedures, duplicate payments, and excessive reliance on costly litigation at the RAF, which led to its massive debt.
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1 commentsthe raf just want to make money out of the tax payers who drive cars to work or business & the casual drivers as we are already paying vat for fuel as well but nothing gets done to thd roads of south Africa to repair the pot holes as the tell us they got no money left at all so where is the money going to then but tht the raf keeps going up every time fuel prices increase where is that money going to then into some one back pocket then but nothing is getting done to fix the roads at all now you still want to tax on license disc as well now as well too that is unfair if the government can’t di their jobs properly in the first place & tell us there is no money to fix the issues at all get your acts together