- The Road Accident Fund is reportedly spending a big portion of its money on administrative costs, specifically legal fees
- The state insurer claimed that for every rand it collects from the fuel levy, claimants receive a mere 45c
- The RAF explained that for every rand it collected it spends 40 cents in order for it to disperse 60 cents
The Road Accident Fund (RAF) is facing extreme financial trouble. The RAF has credited its issues to an increase in administrative costs, especially legal fees. The fund stated that for every R1 collected from the fuel levy claimants receive a mere 45c.
The state insurer revealed details in a response to a highly unexpected order recently granted by the High Court. The order suspended all writs of attachments and execution against the fund's essential assets.
The court also ordered that the RAF begin to clear the backlog of unpaid claims it has. All claims, older than 180 days, need to be paid out before 30 April.
A report by BusinessInsider stated that RAF will be given time to improve its 'operational standing' as the court ordered that claims not older than 180 days be suspended from the beginning of May 2021 until 12 September 2021.
According to a statement issued by the RAF, the fund collects R43 billion a year and only dispersed R26 billions to claimants. The statement confirms that R17 billion was spent on administrative costs with a whopping R10.6 billion of that being used for legal costs.
The RAF explained that for every rand it collects in revenue, it spends 40 cents in order to disperse 60 cents. The insurer is funded by a fuel levy that every motorist in South Africa pays.
The fund receives R2.07 for every litre of either petrol or diesel sold, providing an annual average income of R43 billion. Of this amount, only R26 billion ends up being dispersed to claimants. This is just 60% of the insurer's collected funds.
Previously, Briefly News reported that R400 billion worth of offshore assets will be the focal point for the South African Revenue Service (SARS) as they aim to gather the maximum amount of tax revenue owed to them, while also advising those with offshore assets to get their affairs in order.
According to BusinessTech, taxpayers who do not submit the required information within 21 days could face criminal charges under the Tax Administration Act, according to Reinert van Rensburg.
Following reports by Moneyweb, a member of the Davis Tax committee Judge Dennis Davis, issued advice of which SARS is now heeding to ensure cooperation and maximum recovery of tax revenue. Davis advises emphasised an opinion that SARS must audit high nett worth individuals.
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