New tax planned for South African motorists

There is fierce opposition to Transport Minister Barbara Creecy’s plan to make motorists pay even to prop up the failing Road Accident Fund (RAF).

Creecy said there is merit in a separate, mandatory fee attached to annual vehicle licence disc renewals and initial vehicle registrations.

One of the reasons for the new tax on motorists is the growing adoption of electric vehicles (EVs), where the owners do not use petrol or diesel.

The Road Accident Fund is currently funded almost entirely by a statutory levy levied on every litre of petrol and diesel sold in South Africa.

However, electric vehicle owners use the roads but bypass fuel pumps entirely, thereby avoiding the RAF tax.

The Department of Transport, therefore, sees a vehicle-linked fee as a transitional levy to capture revenue from all road users.

However, the additional tax on motorists drew sharp criticism from many quarters, especially given that the Road Accident Fund is beset by corruption.

One of the biggest opponents to the new tax is the Democratic Alliance (DA), which is ramping up its fight against the proposal.

It said that this new fee is inappropriate, especially during a time when South Africans are battling rising fuel prices and food inflation.

“Instead of fixing the RAF’s long-standing failures, the government is asking hardworking South Africans to pay more,” it said.

The DA said that it was engaging with Creecy regarding plans to replace the RAF through legislative amendment. “We are awaiting her confirmation of a meeting,” it said.

“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.”

The DA said that South Africans should not be forced to foot the bill for the government’s failures.

“The RAF has become an unsustainable burden on taxpayers and motorists. Every litre of fuel purchased already includes a levy that funds the RAF.”

It said that every rand extracted from motorists through new taxes and fees is a rand that cannot be spent on groceries, school fees, transport or supporting a family.

“South Africans should not be punished for the government’s inability to manage the RAF,” the DA said.