The South African government is exploring a new funding model for the Road Accident Fund (RAF) to ensure all road users contribute fairly.
A proposed annual fee linked to vehicle licences is under consideration, aimed at addressing the funding challenges posed by the rise of electric vehicles (EVs). Minister of Transport Barbara Creecy confirmed that the evaluation of potential funding models will be completed during the 2026/27 financial year.
Proposed Annual Fee for Vehicle Licences
The South African government is contemplating an annual fee tied to vehicle licences to ensure equitable contributions to the RAF. This proposal comes as the number of electric vehicles on the roads increases, creating a gap in funding since EV owners do not contribute to the existing fuel levy.
Currently, the RAF is funded through a levy added to every litre of petrol and diesel sold. This system has been effective for decades, but the growing EV market challenges its sustainability. The Department of Transport argues that a vehicle-linked funding model would ensure all road users contribute, regardless of their vehicle type.
South Africa: Key figures on Road Accident Fund
- Evaluation of possible funding models expected to be completed during the 2026/27 financial year
Next Steps for Funding Model Evaluation
- Identify preferred funding option after evaluation completion
- Begin policy discussions and legislative changes
- Consult with stakeholders on the proposed funding model
The proposed annual fee aims to create a fair contribution system for all vehicle owners in South Africa.
