Taxi Industry in the Spotlight for Paying Only R5m in Tax on R90bn Revenue

Taxi Industry in the Spotlight for Paying Only R5m in Tax on R90bn Revenue

- South African Parliament has discovered that the taxi industry hasn't been paying its dues and may face 'raids' from SARS as far as taxes are concerned

- According to the DA Shadow Minister of Finance, Geordin Hill-Lewis, many taxi owners either avoid declaring their returns or register for payroll tax

- With the taxi industry seen as one of the most profitable in the country with estimated revenue of R90 billion, it turns out that taxi owners in Mzansi do not pay tax

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The South African taxi industry is one of the richest industries as far as the economy is concerned, but they are not paying their taxes. This was discovered in parliament and made public by DA Shadow Finance Minister, Geordin Hill-Lewis.

Hill-Lewis posed a question to the country’s Minister of Finance Tito Mboweni, who reportedly made it clear that the South African Revenue Services only received R5 million in the last financial year.

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The South African taxi industry owes SARS more than R80 million in taxes. Image: @BreeTaxiRank/Instagram
The South African taxi industry owes SARS more than R80 million in taxes. Image: @BreeTaxiRank/Instagram
Source: Instagram

According to The South African, the response was provided in Parliament and it comes as a shock when looking at the number of commuters ferried by taxis on a daily basis.

Following the revelation, this implies that a large number of taxi operators aren’t declaring income tax, nor are they chipping in for driver payroll tax. Hill-Lewis posted:

“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&Guardian report puts industry revenues at R90 billion a year. SARS must now act against tax dodgers in the taxi industry.”

Hill-Lewis added that the number means some taxi owners do not pay payroll for their drivers and employees. He added:

“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.”

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According to TheUSExpressNews, Mboweni has since responded to a written parliamentary question that the tax collecting body has collected around R5 million in corporate income tax (IS) from taxi operators.

However, that amount includes taxes levied on their employment income.

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Briefly News reported that the EFF had previously voiced its support for the taxi industry as it calls for more funds to be allocated to providing the sector with Covid-19 relief.

The industry took to the streets on Monday to protest the R1-billion provided to it by the government.

The EFF has slammed the amount as too little, calling for R20 000 at least to be given to each taxi.

Although the protest was no laughing matter, EFF leader Julius Malema was in jovial spirit, as he shared a hilarious photo to reinforce his party's support for the cause.

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Source: Briefly News

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