While the minibus taxi industry is demanding government subsidies, the entire industry pays only R5 million in taxes, as a reply to a DA parliamentary question reveals.
The DA calls on the South African Revenue Service (SARS) to act against tax dodgers in the taxi industry, to ensure that this very lucrative industry pays its fair share.
Now that it has confirmed being aware of this tax evasion, we will request that SARS brief parliament on the enforcement action it intends to take to bring tax dodgers to book.
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.
A 2019 Mail and Guardian report puts industry revenues at R90 billion a year.
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.
It is also unfair to law-abiding, diligent members of the tax paying public. And this undermines tax morality in the whole country. South Africans will start to ask: “why should I pay, if others get away with not paying?”
In the Minister’s reply, he sets out some proactive actions SARS is taking to address this problem. However, these are focused on education and voluntary compliance, and none of these deals with enforcement.
We will not be able to fix the state, or repair government finances, if entire profitable industries just boycott paying tax. This sets a dangerous precedent for the future. We call on SARS to brief Parliament as soon as practically possible.