The Department of Transport has signalled it is working on a new funding model for the Road Accident Fund (RAF), including the possibility of a temporary tax on vehicle licence-disc renewals, the Minister of Transport, Barbara Creecy, said.
Why the change is being considered
The RAF is funded largely through a levy on fuel sales. The department said a transition to electric vehicles (EVs) could reduce revenue from the existing R2.25-per-litre levy on petrol and diesel, and that a licence-disc fee could help ensure the fund remains solvent while the vehicle fleet changes.
The department told stakeholders it would publish the outcome of its work once a final model was agreed. At the time of reporting, the department had not responded to follow-up questions about whether the licence-disc charge remains under active consideration.
Immediate reactions from motor groups and civil society
The announcement drew swift criticism from both motoring and civil action organisations, which argued the proposal would impose an additional burden on motorists and did not address wider problems at the RAF.
- The Automobile Association of South Africa (AA) criticised the concept as misplaced while the RAF remains beset by governance and operational problems.
- Civil action organisation AfriForum described the measure as a possible “double tax”, saying it would affect all motorists rather than solely EV drivers.
“EV adoption is very slow. If one were to compare the rate of EV adoption to the amount of money we’re haemorrhaging from the RAF, it’s abundantly clear that the issue is operational,”
AA CEO Bobby Ramagwede said the idea of a new charge was “laughable”, arguing that fixing administration and inefficiencies at the RAF would be a better priority than introducing new levies.
What is known and what remains unclear
Creecy confirmed her department is drafting a new funding approach to respond to long-term shifts in the transport sector. The department indicated the licence-disc fee would be intended as a transitional measure while motor-fuel levy income declines, but did not provide details on timing, the fee level, or how long any surcharge would apply.
At present the RAF’s primary source of revenue is the fuel levy of R2.25 per litre on petrol and diesel. The department has not released a paper or regulatory proposal setting out scenarios, modelling or a timeline for consultation with the public and industry.
| RAF funding component | Current value |
|---|---|
| Fuel levy | R2.25 per litre (petrol and diesel) |
| Licence-disc surcharge | Under consideration; level not disclosed |
Potential consequences and next steps
If adopted, a licence-disc surcharge would be applied to all motorists renewing their vehicle discs. That would spread costs beyond owners of EVs, prompting questions about fairness and the best mechanism to manage a revenue shortfall caused by technological change.
Key issues that remain open include:
- how any licence-disc fee would be structured (flat fee or scaled by vehicle type/age);
- whether the charge would be temporary or permanent; and
- what safeguards would be introduced to ensure improved RAF governance and efficient use of additional revenue.
Stakeholders such as the AA have urged the department to prioritise fixing the RAF’s internal problems before seeking new revenue streams. AfriForum warned that a broad licence-disc fee could amount to a regressive “double tax” on motorists.
The department said it would communicate the outcome of its work publicly once finalised. At the time of publication, it had not provided further details or a timetable for public consultation.
This is a developing story; further details will be published when the Department of Transport issues its final proposals or responses to requests for clarification.
