New tax for everyone who owns a car in South African on the cards

South Africa’s Minister of Transport, Barbara Creecy, has confirmed that the government is working on a new funding framework for the Road Accident Fund (RAF).

Creecy shared this information in a response to a question about the Road Accident Fund’s funding in the National Assembly.

This question followed previous statements from the Transport Minister about potential changes to the RAF funding framework.

Creecy said that there was 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 the new fee is inappropriate, especially at 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 Department of Transport working on a new funding model

Member of Parliament, Makashule Gana, recently asked Creecy about the alternative funding models her department has considered for the Road Accident Fund.

He also asked by what date her department intends to finalise a new funding model and details about an extra fee to be added to annual licence disc renewals.

Creecy said that the Department of Transport, in collaboration with the Road Accident Fund (RAF), has initiated a structured review of the RAF funding framework.

This review, she said, was guided by a formal business case. “Once this process is completed, it will be communicated publicly,” she said.

The Minister said that the evaluation of the proposed funding options will likely be concluded during the 2026/27 financial year.

She added that the preferred model will then be presented for further policy, legislative, and stakeholder processes.

“As part of the assessment, the proposed model must be designed to ensure it is equitable, sustainable and appropriate for the South African context,” she said.

She explained that this was necessary to ensure there were no unintended disparities across categories of vehicle users.