The South African taxi industry, a cornerstone of the nation's transport landscape, has long been under scrutiny for its apparent underpayment of taxes. However, a closer examination reveals a more complex reality. In 2021, the industry paid only R5 million in annual Corporate Income Tax . This is a small amount compared to the industry’s estimated annual revenue of R90 billion. Yet it is crucial to understand the intricacies that lead to this apparent disparity.
The intricate tax declarations facing the taxi industry are also deeply rooted in its asset ownership structure. Many taxi operators hold their vehicles in a personal capacity rather than through juristic companies capable of submitting financial statements, declaring, and claiming VAT, and reporting their employees' profiles to SARS.
To illustrate this, consider the case of a taxi owner operating a Toyota Quantum for daily commuter transport, covering over 200km each working day. They now contend with an additional monthly expense of R5 000 in fuel costs compared to pre-Covid-19 rates, reflecting a staggering 40% surge in fuel prices.
In addition to these mounting cost pressures, the existing tax regulations are ill-suited to accommodate the unique configuration of the taxi industry. It is therefore judicious to consider instituting a quid pro quo fuel tax exemption or diesel refund for the taxi industry similar to those enjoyed by the farming, mining and rail industry. This can act as a means to alleviate some of the financial burdens burdening taxi operators and to incentive industry transformation and adoption. Technology in this instance would be key in monitoring the fuel expense, taxi movements and also automatically submitting refund claims.