Questions over taxi industry tax

Only R5 million in corporate income taxes was collected from the minibus taxi industry in the last tax year, says the South African Revenue Service (Sars).

This came to light when Finance Minister Tito Mboweni responded to parliamentary questions asked by Democratic Alliance MP Geordin Hill-Lewis.

The ministry goes on to point out that the corporate tax contribution by the minibus taxi industry is in actual fact lower than the R5 million figure as this amount includes tax collected from the sector’s employment income.

Treasury notes that the industry does not correctly disclose income from taxi business on their corporate income taxes because it its included under a generic income source code.

“We were not able to determine income solely from taxi operations. Our analysis indicates the majority of the taxi industry is declaring a nil return or are having a refund due to them.”

The minibus taxi industry transports 15 million people or two thirds of commuters in SA, has 20 000 owners and 200 000 employees, and is estimated to have a turnover of over R16.5 billion a year.

The industry gets no government subsidiaries and in June 2020 Transport Minister Fikile Mbalula announced a R1.135 billion relief package to help it mitigate the impact of Covid-19.

Sars under new commissioner Edward Kieswetter is leaving no stone unturned when it comes to getting what’s owed to it. This includes the taxi industry.

“Sars is concerned about tax avoidance across the tax ecosystem in general; this is more so in this particular industry; to this end, Sars adopting a number of targeted interventions.”

The interventions, however, are more carrot than stick as the revenue service looks to build a tax and customs system that is premised on voluntary compliance.