The R100 billion South African industry that pays virtually no tax
South Africa’s taxi industry, which generated an estimated R90 billion to R100 billion in annual revenue, is paying virtually no tax.
In March 2025, Organisation Undoing Tax Abuse (Outa) CEO Wayne Duvenage said that formalising and taxing the taxi industry can help raise revenue for the state.
Duvenage said formalising the taxi industry, which is currently not within the tax base, can broaden South Africa’s tax base.
“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,” he said.
The Outa CEO argued that there was no reason why the South African taxi industry, which deals mainly in cash, should not be taxed.
His comments echoed the view of the DA, which, in 2021, highlighted that this lucrative industry pays only R5 million in taxes.
The low tax compliance rate of the South African minibus taxi industry was revealed in a reply to a DA parliamentary question.
“The Minister of Finance has revealed that only approximately R5 million in tax is collected from the entire minibus taxi industry,” the DA said.
“This means that the vast majority of taxi operators and owners are declaring no corporate tax income at all and are not paying payroll tax for their drivers and employees.”
It is illegal to under-declare income and to evade paying taxes. This is a crime under the Tax Administration Amendment Act, carrying a possible prison sentence of two years.
The DA called on the South African Revenue Service (SARS) to act against tax dodgers in the taxi industry, ensuring that this industry pays its fair share.
However, it is easier said than done for the South African Revenue Service to get the minibus taxi industry to start paying taxes.
A large percentage of the fares taxi operators collect in cash, and there is little financial documentation about the operations.
This means that it is very challenging for SARS to establish how much money operators make and how much tax they must pay.
South African National Taxi Council (SANTACO) hits back
The South African National Taxi Council (SANTACO) has dismissed claims that the minibus taxi industry does not pay tax.
SANTACO called these claims misguided and shallow, arguing that most taxi operators comply by paying personal income tax individually.
SANTACO spokesperson Mmatshikhidi Rebecca Phala told The Star newspaper that claims of tax evasion ignore how the taxi sector is structured and taxed.
“The taxi industry, in the main, is comprised of operators who run their businesses as sole proprietors,” she explained.
“This means they operate their businesses as individuals and continue to be taxed as individuals.”
Phala said these individuals are issued tax clearance certificates by SARS, which they use for numerous reasons, including in their applications and their renewals of the operating licenses.
She highlighted that the tax clearance certificates by SARS are a prerequisite for renewals of the operating licenses.
Despite this, she admitted that South Africa’s current tax framework does not fully accommodate the informal nature of the minibus taxi industry.
“As such, currently, a large part of the taxi industry does not participate in the greater companies’ tax regime,” she said.
“The current structure of the tax reform needs to be re-examined to ensure a speedy resolution of this taxation loophole”.
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