Mandatory licence renewal tax change for South Africa is coming
Transport Minister Barbara Creecy has reiterated that her department is researching ways to expand the Road Accident Fund (RAF) levy in the country as drivers move away from traditional fossil fuels.
Speaking to the Sunday World Podcast, the minister said that amid wider changes and restructuring of the RAF, revenue collection is a pressing concern.
She said that the funding for the RAF currently comes from the RAF levy attached to the per-litre sale of petrol and diesel in South Africa, but this is changing.
“We have to look at the fact that there’s a big shift to electric vehicles,” she said.
“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.”
As motorists move away from using fossil fuels, revenue collected through the RAF levy, currently set at R2.25 per litre, will decrease.
However, motorists driving electric vehicles—who do not contribute to the RAF—will still expect to benefit from the fund in the event of a road accident.
“So how are they going to contribute to the fund? This is research that we’re doing,” Creecy said.
Creecy has previously suggested that one way to ensure all motorists pay the levy, regardless of the vehicle they drive, is to implement it in more places.
This could include implementing the levy on all foreign-registered motor vehicles entering South Africa and attaching it to motor vehicle registration and/or licence renewals.
However, whether this would separate it from petrol and diesel prices is unclear. If not, this could see motorists being hit multiple times with levies to fund the RAF.
“We need to bring in amendments; until we bring in those amendments, there’s a limit to which there can be managerial solutions to some of the broader financial problems that the fund faces,” she said.
A silver lining for petrol prices
As the Department of Transport investigates how to implement new funding mechanisms for the RAF, Creecy has made it clear that she has no intention of increasing the RAF fuel levy itself.
In its 2025/26 Annual Report, the RAF said it made a proposal to the Department to hike the RAF levy to R3.00 per litre.
In follow-up statements, Creecy rejected the notion.
Speaking to ENCA, the minister said that as long as she is in the job as head of the department, she will not apply to the National Treasury for an increase in the RAF fuel levy.
“As long as I am in this job, we will not apply to the National Treasury for an increase in the fuel levy,” she said at the time.
“I think consumers are under enough pressure; what we have to do is sort out the mismanagement that has happened at the Road Accident Fund for a long time.”
The National Treasury increased the RAF levy for the first time in five years in 2026, hiking the tax by 7 cents per litre to R2.25, from R2.18 before.
The levy had been frozen at R2.18 per litre since 2021/22.
In the latest Medium Term Budget Policy Statement, Finance Minister Enoch Godongwana pointed to tax collections exceeding targets set in the February Budget, with no mention of needing additional tax hikes.
Despite this, the Department of Energy and Electricity has proposed a new levy system that some motorists could be saddled with, again targeting petrol and diesel.
This proposed levy is a “freebate” system on high-emission vehicles, which would be used to finance rebates for lower-emission vehicles.
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