SANTACO dismisses claims that taxi industry avoids paying tax

image: Internet

by Kelebogile Matlou

The South African National Taxi Council (SANTACO) has strongly disputed charges that the taxi business does not pay taxes, calling them “misguided and shallow.” According to the council, most taxi operators pay personal income tax individually since they operate as sole proprietors in the industry.

For years, the taxi business has been accused of neglecting to pay its due share of taxes. In 2021, the Democratic Alliance (DA) expressed alarm after a parliamentary response indicated that the minibus taxi business contributed just approximately R5 million in tax, while predictions that its annual income was R90 billion.

More recently, the Organisation Undoing Tax Abuse (OUTA) urged the government to increase the tax base by explicitly include both the taxi and informal sectors. However, SANTACO spokesman Mmatshikhidi Rebecca Phala refuted such assertions, emphasizing that the industry’s tax compliance is frequently disregarded. 

“The perception is incorrect and superficial. The taxi sector is primarily made up of individual owners. This implies they run their enterprises as individuals and continue to be taxed as such,” Phala explained. She mentioned that the South African Revenue Service (SARS) issues tax clearance certificates to operators, which they must use for operating license applications and renewals. 

Phala recognized that the present tax system did not properly address the industry’s informal nature, and urged the government to explore improvements.

“As a result, a major portion of the taxi sector now does not pay taxes under the larger companies’ regime. The existing framework of tax reform must be reconsidered to guarantee a timely settlement of this taxation gap,” she said.