South Africa is investigating a possible new levy on vehicle licence renewals to help fund the financially distressed Road Accident Fund (RAF), as the government explores alternatives to its reliance on petrol and diesel taxes.
Also see: South African motorists could face new car licence disc tax
According to BusinessTech, Transport Minister Barbara Creecy has reiterated that her department is researching ways to broaden the RAF’s funding base as the adoption of electric vehicles (EVs) grows.
“We have to look at the fact that there’s a big shift to electric vehicles,” Creecy said during an interview on the Sunday World Podcast.
“At the moment, the funding for the road accident fund comes from the fuel levy, but going forward into the future, more people may not be using fossil fuels.”
The RAF is currently funded through a levy of R2.25 per litre of petrol and diesel. Electric vehicle owners do not contribute through this mechanism, although they remain eligible for compensation following road accidents.
Transition to electric vehicles
In its report on the proposed licence renewal tax, MyBroadband reported that the Department of Transport was considering a transitional levy to address the potential decline in fuel-based revenue. The proposal could extend to vehicle registrations and licence disc renewals, although the government has not confirmed the amount or whether all motorists would be charged.
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The proposal has drawn criticism from motoring organisations. Automobile Association of South Africa chief executive Bobby Ramagwede argued that the RAF’s problems were primarily operational rather than a consequence of the transition to electric vehicles.
“EV adoption is very slow,” he told MyBroadband, adding that the scale of the fund’s financial problems made its operational shortcomings a more pressing concern.
AfriForum has also warned that the proposal could effectively make petrol and diesel vehicle owners pay twice, as they already contribute to the RAF through fuel purchases.
Fuel levy
Meanwhile, TopAuto reported that the RAF’s revenue fell by 5% to R48.1 billion in the 2025/26 financial year, from R50.8 billion in the previous year. The fund has also proposed increasing the fuel levy to R3 per litre, but Creecy has said she will not seek a further increase.
The minister said legislative amendments would be needed to address some of the fund’s broader financial challenges.
For now, the licence renewal levy remains under investigation, with no confirmed implementation date, fee structure or final decision on which motorists would be affected.
Featured image: Gallo Image/Brenton Geach
Originally published by African Insider.
Also see: RAF financial strain deepens amid R23.3 billion claims from foreign nationals
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