Taxi industry calls for government subsidy in 2025 budget

The taxi industry is estimated to be worth more than R90bn per annum and employs around 300,000 people directly and indirectly.

In 2020, former transport minister Fikile Mbalula flighted a proposal to introduce a subsidy for the taxi industry by April 2021, saying the specifics of this could be debated at a lekgotla with all roleplayers. However, this did not materialise.

In May 2022, Mbalula told the Santaco elective conference that democratic practices within the industry, including an end to violent infighting, were a non-negotiable criteria for government financing.

“Participation in any commercial venture or undertaking any economic activity using public funds is subject to a condition that the benefits from such investments must accrue to every operator irrespective of affiliation,” he said.

“We have been unequivocal in our commitment to introduce a subsidy policy that recognises the role of the taxi industry and benefits it as such. Santaco must engage with the draft policy document before this is finalised for implementation… Equally, the re-imagination of the taxi recapitalisation programme entails unlocking the economic value chain for the benefit of the industry. Government has invested a significant amount of money in the programme, with R5bn having been disbursed since its inception in 2006. The industry must take advantage of this investment and create a multiplier-effect in the economic value chain. Over the last year we have significantly underspent on the scrapping allowance because the uptake is very far from what we anticipate. This is an unacceptable state of affairs as it creates the impression that the industry is not interested in this programme.

Operators in the industry have rejected previous attempts to regulate the sector.

Government’s R1.14bn Covid-19 relief fund offer for the sector, which had conditions attached to it aimed at formalising the sector, were rejected by taxi operators, Business Day reported. Among these were for taxi operations to be registered as businesses and to have bank accounts into which the relief allowances would be paid, and that these businesses should be registered for income tax and other taxes related to running a business.