New vehicle tax proposal sparks anger

SOUTH African motorists could face a new financial burden as the government considers introducing a vehicle-linked fee to help fund the struggling Road Accident Fund (RAF).

Minister of Transport Barbara Creecy has said that the department is reviewing the RAF’s funding model, with a separate mandatory fee attached to annual vehicle licence renewals or initial registrations among the options being considered.

“The Department of Transport, in collaboration with the Road Accident Fund, has initiated a structured review of the RAF funding framework, guided by a formal business case. Once this process is completed, it will be communicated publicly,” Creecy said.

The move comes as the government looks for a long-term solution to fund the RAF. The fund is currently supported mainly by a fuel levy on petrol and diesel. However, as more people switch to electric vehicles, which use roads but do not pay fuel levies, the government says a vehicle-based fee could ensure all road users contribute.

The RAF has also faced years of challenges, including allegations of corruption, poor governance and financial mismanagement. Critics have argued that the government should first address these problems and improve accountability before asking motorists to pay additional fees.

The DA has opposed the proposed fee, saying the RAF crisis is not caused by motorists failing to contribute enough, but by years of mismanagement and poor governance.

The party said introducing another charge would place further pressure on households already dealing with rising living costs.

“The RAF is not in crisis because motorists are not paying enough. The RAF is in crisis because years of mismanagement, corruption, waste and poor governance have left it financially crippled. South Africans should not be forced to foot the bill for the government’s failures,” the party said.

Unions have also rejected the idea of a new vehicle tax, warning that it would add further financial pressure on workers who are already struggling with rising costs.

The Public Servants Association (PSA) said the government should focus on improving governance at the RAF, reducing waste and addressing financial mismanagement before introducing any additional charges.

“At a time when South Africans, and public servants in particular, are grappling with rising living costs, increasing fuel prices, electricity tariff hikes and stagnant wages, any additional tax burden will be insensitive and unjustifiable. The introduction of another compulsory tax will place an additional financial burden on public servants.”

“RAF cannot expect citizens to carry the financial consequences of its inability to manage public funds effectively.”

The Road Accident Fund (RAF) pulls in more than R48 billion from the fuel levy annually, but thousands of road crash victims are still waiting for their payouts.

The Standing Committee on Public Accounts (SCOPA) members were also left scratching their heads after hearing that the fund, which is meant to assist victims of road accidents, reportedly spent R48 300 on a single bucket hat from Dzinge Productions.

Spokesperson McIntosh Polela maintained that although the invoice indicated a quantity of one hat, it actually represented multiple units.