Minibus taxi tax sars

Photo: Flickr / Steve Guess

Pay up! SA’s R90 billion taxi industry may face ‘huge tax raids’ from SARS

SARS estimate that the minibus taxi industry is paying just 0.00055% of its total earnings in tax – and there are now calls for ‘drastic action’.

Minibus taxi tax sars

Photo: Flickr / Steve Guess

A stunning response to one Parliamentary question has revealed just how little tax is paid by those running businesses in South Africa’s minibus taxi industry. With millions of commuters using the low-fare transport everyday, some estimates place the market’s total value at R90 billion – which would mean the profession has taken SARS for a ride.

How much tax is paid by the minibus taxi industry?

Geordin Hill-Lewis is the shadow finance minister. He asked his opposite number, Tito Mboweni, just how much tax revenue is generated by taxi companies. It turns out, only R5 MILLION is collected each year.

We’ve crunched the numbers, and should those figures align, the taxi industry is being taxed at a rate of 0.00055%. This implies that a large number of operators aren’t declaring income tax, nor are they chipping in for driver payroll tax. This, as Hill-Lewis is keen to point out, remains an act of criminality.

“In 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 in South Africa. Yet a 2019 Mail and Guardian report puts industry revenues at R90 billion a year. SARS must now act against tax dodgers in the taxi industry.”

“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.”

SARS told to get tough with non-compliant businesses

Mboweni has since set out some proactive actions SARS will take to address this problem, and the agency looks to launch a raid for billions of rand’s worth of unpaid taxes from minibus taxis.

However, these interventions are simply focused on education and ‘voluntary compliance’ – with details about enforcement remaining somewhat lightweight. The DA has asked SARS to brief Parliament as a matter of urgency.