The RAF can obtain its funding from several sources as outlined as fuel levy income, government grants paid by National Treasury when there is a pressing need such as an acute cash shortage, and borrowings which are an allowed source of funding according to the RAF Act, and investment income acquired from invested funds that occasionally result when the RAF's operational capacity prevents it from paying out all its funds.
RAF Fuel levy The primary source of income for the RAF compensation scheme is a levy raised on fuel. The levy is measured in terms of cents per litre on petrol and diesel fuel sold in South Africa and forms part of the general fuel tax regulated by government. The fuel levy per litre is set by National Treasury on a yearly basis, whereas total fuel sales are influenced by a number of
macro-economic factors. On an annual basis, the RAF requests National Treasury for an increase in the RAF Fuel Levy, based on a
financial model and a calculation of its costs during the coming year. The full extent of the RAF Fuel Levy requested is seldom granted. This is because National
Treasury has historically set the levy on the basis of a pay-as-you-go principle rather than with the purpose of establishing a fully funded position for the RAF. During the 2012 financial year the RAF Fuel Levy was set at 80 cents per litre. The RAF is not involved in the collection of its fuel levy. The
South African Revenue Service ("SARS") administers the collection of the fuel levy and pays it to the RAF, in accordance with provisions of the Customs and Excise Act, 1964 and the RAF Act. The two main variables that determine the income of the RAF are the volume of petrol and diesel sold per annum and the rate of the levy. The RAF Fuel Levy can be viewed as a compulsory contribution to
social security benefits which is used only for the specific purposes as provided for in legislation.
Financial position The RAF is affected by general economic conditions and other environmental factors, and by the extent to which it manages its costs effectively. The nexus of all these factors is road activity in South Africa: • The number of vehicles on the road influences the amount of fuel sold, which in turn affects the revenue granted to the RAF by National Treasury. This revenue comprises the fuel levy together with
ad hoc government grants and minor income from investments to equal the RAF's total revenue. • The number of vehicles on the road also influences the number of accidents, although many other factors influence this statistic, particularly the relative severity of accidents. Volume and severity of accidents influence the volume and average value of claims made against the RAF. Claims, combined with the cost of third parties, such as attorneys and medical/legal experts, and the RAF's administration costs, equal the RAF's total costs. == Corruption ==