Mbalula backs ‘long overdue’ subsidies for taxi industry
Key transport provider deserves a government scheme, says minister
The government plans to introduce a subsidy for the R50bn taxi industry by April 2021, transport minister Fikile Mbalula says.
The taxi industry, which is unregulated, is a big part of SA’s economy, generating R50bn in revenue a year and spending more than R20bn on fuel.
Releasing a set of discussion documents on the taxi industry ahead of the national taxi summit planned for the end of October, Mbalula said: “It’s long overdue: if you transport 15million people per day, then that industry deserves a government scheme, like we do with other modes of transport.”
The government subsidises rail and bus transport, including private bus operators.
“We have made a firm commitment that the time has arrived for the taxi industry, which moves the vast majority of our people, to benefit from the subsidy scheme. The subsidy scheme will form an integral part of our economic package for the industry.”
The promise comes as SA’s public finances are under enormous pressure with a budget deficit of 15.7% and sharp spending cuts on the agenda.
Mbalula did not say what form or shape the subsidy would take, stressing that the process would be agreed on by all stakeholders during the lekgotla. It was also not elaborated on in the discussion papers.
A subsidy system would imply formalising the industry, which operators have resisted.
For instance, taxi operators rejected the government’s R1.14bn Covid-19 relief fund for the sector and the conditions attached to it, which were aimed at formalising the sector. Among these were for taxi operations to be registered formally as businesses and have bank accounts into which the relief allowances would be paid, and that these businesses should be registered for income tax and other taxes related to running a business.
Efficient Group chief economist Dawie Roodt said the taxi industry was already subsidised by the taxi recapitalisation programme and it did not pay taxes.
Mbalula said the documents did not represent any formal government position and were intended only to “stimulate debate and discussion.”
They explored various models of empowerment, including a national company that could compete for government tenders, and a proposal for a national co-operative bank with branches in all provinces.
Thabiso Molelekwa, spokesperson of the SA National Taxi Council, the largest taxi organisation in the country, said: “We are getting into this discussion with renewed hope that indeed for the first time after 25 years of the first [national taxi task team] document that united the taxi industry, we will have an opportunity now to realise the ambition that was set by government 25 years ago in as far as the industry is concerned.” Theo Malele, spokesperson of the National Taxi Alliance (NTA), the secondlargest taxi organisation in SA, said: “We are for the transformation of the taxi industry. We welcome the ideas on having a bank and that the taxi industry be subsidised.
“We, however, still want the government to unpack its ideas so that we understand exactly the proposals put before us. We cannot walk blindfolded into the future. We welcome the idea of speaking in one voice as an industry, but we would want to maintain our independence as the NTA.” —