{"id":837967,"date":"2025-09-24T10:00:00","date_gmt":"2025-09-24T08:00:00","guid":{"rendered":"https:\/\/businesstech.co.za\/news\/?p=837967"},"modified":"2025-09-23T14:10:08","modified_gmt":"2025-09-23T12:10:08","slug":"the-r100-billion-south-african-industry-that-pays-virtually-no-tax","status":"publish","type":"post","link":"https:\/\/businesstech.co.za\/news\/finance\/837967\/the-r100-billion-south-african-industry-that-pays-virtually-no-tax\/","title":{"rendered":"The R100 billion South African industry that pays virtually no tax"},"content":{"rendered":"\n

South Africa\u2019s taxi industry, which generated an estimated R90 billion to R100 billion in annual revenue, is paying virtually no tax.<\/p>\n\n\n\n

In March 2025, Organisation Undoing Tax Abuse (Outa) CEO Wayne Duvenage said that formalising and taxing the taxi industry<\/a> can help raise revenue for the state.<\/p>\n\n\n\n

Duvenage said formalising the taxi industry, which is currently not within the tax base, can broaden South Africa\u2019s tax base.<\/p>\n\n\n\n

\u201cIt\u2019s not to punish the taxi industry. It\u2019s to say you are formalised, you are businesses, you need to be brought into the net,\u201d he said.<\/p>\n\n\n\n

The Outa CEO argued that there was no reason why the South African taxi industry, which deals mainly in cash, should not be taxed.<\/p>\n\n\n\n

His comments echoed the view of the DA, which, in 2021, highlighted that this lucrative industry pays only R5 million in taxes.<\/p>\n\n\n\n

The low tax compliance rate of the South African minibus taxi industry was revealed in a reply to a DA parliamentary question.<\/p>\n\n\n\n

\u201cThe Minister of Finance has revealed that only approximately R5 million in tax is collected from the entire minibus taxi industry,\u201d the DA said.<\/p>\n\n\n\n

\u201cThis 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.\u201d<\/p>\n\n\n\n

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.<\/p>\n\n\n\n

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.<\/p>\n\n\n\n

However, it is easier said than done for the South African Revenue Service to get the minibus taxi industry to start paying taxes.<\/p>\n\n\n\n

A large percentage of the fares taxi operators collect in cash, and there is little financial documentation about the operations.<\/p>\n\n\n\n

This means that it is very challenging for SARS to establish how much money operators make and how much tax they must pay.<\/p>\n\n\n\n

South African National Taxi Council (SANTACO) hits back<\/h2>\n\n\n\n
\"\"<\/a>
Mmatshikhidi Rebecca Phala <\/figcaption><\/figure>\n\n\n\n

The South African National Taxi Council (SANTACO) has dismissed claims that the minibus taxi industry does not pay tax.<\/p>\n\n\n\n

SANTACO called these claims misguided and shallow, arguing that most taxi operators comply by paying personal income tax individually.<\/p>\n\n\n\n

SANTACO spokesperson Mmatshikhidi Rebecca Phala told The Star newspaper<\/a> that claims of tax evasion ignore how the taxi sector is structured and taxed.<\/p>\n\n\n\n

\u201cThe taxi industry, in the main, is comprised of operators who run their businesses as sole proprietors,\u201d she explained.<\/p>\n\n\n\n

\u201cThis means they operate their businesses as individuals and continue to be taxed as individuals.\u201d<\/p>\n\n\n\n

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.<\/p>\n\n\n\n

She highlighted that the tax clearance certificates by SARS are a prerequisite for renewals of the operating licenses.<\/p>\n\n\n\n

Despite this, she admitted that South Africa\u2019s current tax framework does not fully accommodate the informal nature of the minibus taxi industry.<\/p>\n\n\n\n

“As such, currently, a large part of the taxi industry does not participate in the greater companies’ tax regime,\u201d she said.<\/p>\n\n\n\n

\u201cThe current structure of the tax reform needs to be re-examined to ensure a speedy resolution of this taxation loophole”.<\/p>\n","protected":false},"excerpt":{"rendered":"

South Africa\u2019s taxi industry, which generated around R100 billion in annual revenue, is paying virtually no tax.<\/p>\n","protected":false},"author":10,"featured_media":811443,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[11121],"tags":[23637,18308,23636,19922,1989],"class_list":["post-837967","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-finance","tag-minibux-taxi-industry","tag-organisation-undoing-tax-abuse-outa","tag-south-african-national-taxi-council-santaco","tag-south-african-revenue-service-sars","tag-wayne-duvenage"],"_links":{"self":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/837967","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/users\/10"}],"replies":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/comments?post=837967"}],"version-history":[{"count":1,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/837967\/revisions"}],"predecessor-version":[{"id":837970,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/837967\/revisions\/837970"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media\/811443"}],"wp:attachment":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media?parent=837967"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/categories?post=837967"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/tags?post=837967"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}