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 NT on an annual basis, whereas total fuel sales are influenced by a number of macro-economic factors. The RAF annually requests an increase in the RAF Fuel Levy from NT based on a financial funding 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 NT has historically set the levy on a pay-as-you-go basis rather than with the purpose of establishing a fully funded position for the RAF. Currently (2016/17), the RAF Fuel Levy is set at 163 cents per litre.
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 (Act No. 91 of 1964) and the RAF Act.
The two main variables that determine the income of the RAF are the volumes 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. The RAF Fuel Levy collection process is depicted in the figure below.