SOUTH AFRICA — The South African Revenue Services (SARS) has said that the minibus taxi industry in the country pays R5 million only in corporate annual income tax, despite having an annual turnover of over R16.5 billion.
This revelation was made by Finance Minister Tito Mboweni who was responding to parliamentary questions about the industry’s tax contribution.
The ministry pointed out that the corporate tax by the minibus taxi is actually lower than R5million since this amount includes tax collected from the sector’s employment income.
“This is because the industry does not correctly disclose income from taxi business on their CIT returns but [includes it] under a generic income source code. We were not able to determine income solely from taxi operations.
“Our analysis indicates that majority of the taxi industry is declaring a nil return or are having a refund due to them. “ said Mboweni in a statement.
A breakdown by SA taxi which is the country’s largest financier to the industry shows that 69% of local households use minibus taxis.
The minibus taxi industry transports 15 million commuters in South Africa and is estimated to have a turnover of more than R16.5 billion annually.
The taxi industry has 20 000 owners and 200 000 employees.
SARS is now under new commissioner Edward Kieswetter who has vowed to leave no stone unturned when it comes tax collection.
“SARS is concerned about tax avoidance across the tax ecosystem in general; this is more so in this particular industry; to this end, Sars adopting a number of targeted interventions.” He said.
SARS has embarked on a compliance plan for the industry to encourage voluntary compliance and potentially propose an approximate tax regime specifically for the Minibus Taxi industry.