Tax­ing guessti­mate

Daily turnover could be R233m

Finweek English Edition - - Economic trends & analysis - GARTH THE­UNIS­SEN

SOUTH AFRICA’S roughly 120 000 minibus taxis may be a bane to mo­torists but they are an es­sen­tial cog in the wheel of the econ­omy, fer­ry­ing an es­ti­mated 5m to 10m pas­sen­gers to work and back each day.

Al­though the ex­act con­tri­bu­tion of the minibus taxi in­dus­try to SA’s GDP is hard to quan­tify given its un­reg­u­lated na­ture, economists es­ti­mate that the turnover could be as high as R150m a day.

That’s us­ing a re­turn fare from Soweto to cen­tral Jo­han­nes­burg of about R15 a day as a na­tional bench­mark.

Though some economists ar­gue that R70m is closer to the mark (as the Soweto/Jo­han­nes­burg route is one of the more ex­pen­sive trips), Econometrix econ­o­mist Tony Twine says that R150m is en­tirely within rea­son. In fact, Twine reck­ons the to­tal size of the minibus taxi in­dus­try equates to around 5% of GDP.

If Twine’s es­ti­mate is cor­rect, then the daily turnover fig­ure of R150m could be too low. Given that nom­i­nal GDP was es­ti­mated at R1,7 tril­lion for the 2006/07 fis­cal year, 5% would trans­late into a to­tal an­nual turnover of R85bn – R5bn more than Rem­gro’s mar­ket cap­i­tal­i­sa­tion.

That would im­ply a daily turnover just shy of R233m. It’s lit­tle won­der then that Gov­ern­ment is so keen to en­sure that the in­dus­try is reg­u­lated – and taxed.

Newspapers in English

Newspapers from South Africa

© PressReader. All rights reserved.