One of South Africa’s most lucrative industries, the taxi sector, worth an estimated R100 billion a year, is reportedly operating almost entirely tax-free, thanks to a long-standing loophole in the country’s tax system. This is according to theOrganisation Undoing Tax Abuse (OUTA)and theDemocratic Alliance (DA), who claim that the vast majority of taxi operators do not pay corporate tax, VAT, or payroll taxes, despite thesize of the industry. This is according to theOrganisation Undoing Tax Abuse (OUTA)and theDemocratic Alliance (DA), who claim that the vast majority of taxi operators do not pay corporate tax, VAT, or payroll taxes, despite the According to reports, this is largely due to the informal and cash-based nature of the sector.
Most taxi fares are paid in cash, and operators rarely issue receipts or keep formal financial records. “Broaden the tax base.So, we’ve gota lot of informal industriesandthe taxi industrythatis not within the tax base.If youjustgo and start doing that, start slowly, we should be able to get R2 billion a year, build that up to about R9 billion per annumgoing forward,”OUTA CEO Wayne Duvenage in an interview with the SABC earlier this year. go and start doing that, start slowly, we should be able to get R2 billion a year, build that up to about R9 billion per annum OUTA CEO Wayne Duvenage in an interview with the SABC earlier this year.
“It’s not to punish the taxi industry, it’s to say you are formalised, you are businesses, you need to be brought into the net. There’s no reason why an industry like the taxi industry should not be taxed.” IOL previously reported thatthe South African National Taxi Council (SANTACO)has labelled claims that the taxi industry does not pay tax as “misguided and shallow”, saying that most operators comply by paying personal income tax individually.
