PRETORIA, SOUTH AFRICA – JULY 21: Taxi’s being sanitzed while Gauteng MEC for Public Transport and Roads Infrastructure Jacob Mamabolo launches taxi rank Covid-19 support committees to ensure full compliance with public transport regulations in order to curb the spread of the virus on July 21, 2020 in Pretoria, South Africa. According to a media release, the taxi ranks support committees will be tasked with, amongst others, the enforcement of regulations including social distancing, cleaning and disinfecting of loading bays and taxis, sanitisation of all commuters and ensuring that no one gets into a taxi without a mask (#NoMaskNoRide). (Photo by Gallo Images/Alet Pretorius)
PRETORIA, SOUTH AFRICA – JULY 21: Taxi’s being sanitzed while Gauteng MEC for Public Transport and Roads Infrastructure Jacob Mamabolo launches taxi rank Covid-19 support committees to ensure full compliance with public transport regulations in order to curb the spread of the virus on July 21, 2020 in Pretoria, South Africa. According to a media release, the taxi ranks support committees will be tasked with, amongst others, the enforcement of regulations including social distancing, cleaning and disinfecting of loading bays and taxis, sanitisation of all commuters and ensuring that no one gets into a taxi without a mask (#NoMaskNoRide). (Photo by Gallo Images/Alet Pretorius)
Following a bombshell response in Parliament, it was revealed that the minibus taxi industry in South Africa has been avoiding its taxes en masse. The R90 billion market accounted for a tiny, tiny amount of SARS revenue last year – but Tito Mboweni and his colleagues at SARS are already trying to rectify the issue.
Mboweni, SARS come clean on revenue shortfall
The minister said the interventions are aimed at achieving the SARS strategic intent of building a taxes and customs system for the rogue business owners. DA Member of Parliament, Geordin Hill-Lewis, had in his question to the Mboweni, asked how much in corporate tax had the revenue collector received from the minibus taxi industry.
Mboweni said just R5 million had been collected in Corporate Income Tax (CIT) from taxi operators. However, he added, this amount includes tax collected from their employment income – and many ‘artful dodgers’ have hoodwinked SARS:
“It’s because the industry does not correctly disclose income from taxi business on their CIT returns but included under a generic income source code. We were not able to determine income solely from taxi operations. Our analysis indicates that the majority of the minibus taxi industry is declaring a nil return or are having a refund due to them.” | Tito Mboweni
Taxis and Taxes: Minibus operators will be pushed to pay-up
So, what are Mboweni and SARS going to do about it? They want to nudge non-compliant business owners in the right direction first. They are encouraging voluntary tax payments at first, before establishing an ‘appropriate tax regime’ for all operators. It is hoped that this will eventually make tax avoidance in the industry ‘incredibly difficult to do’:
“In response to the perceived non-compliance by the minibus taxi industry, SARS has commenced a process of developing a compliance plan for the Taxi industry to encourage voluntary compliance, and potentially propose the appropriate tax regime specifically for the industry. This will make it hard and costly to remain non-compliant.”
“This work will be concluded in the 2021/22 financial year. The working with and through stakeholders – as one of the stated strategic objectives – is crucial, and informs the stakeholder engagements as detailed above.”
