Taxi industry will get R1 billion bailout
Government has agreed to set aside R1 billion to rescue the taxi industry, but strict rules apply, including that this relief will only be accessible to operators with valid operating licences.
Minister of Transport Fikile Mbalula. Picture: Jacques Nelles
Following engagements with the public taxi industry to address concerns related to the increase in taxi fares by the sector, Transport Minister Fikile Mbalula says the Covid-19 pandemic has had a devastating impact on families, small business and the economy.
In adapting the transport strategy to tackle Covid-19, gradual resumption of most transport sectors will be allowed.
“The department of transport had also agreed with the National Treasury to designate the South African Revenue Service (Sars) as the implementing agency to register and administer the relief to the taxi industry, due to their proven capacity in handling transactions of this nature.
“Government has offered the taxi industry a relief package of R1.135 billion. Reaching agreement within government for this relief support for the taxi industry was a difficult process that involved extensive lobbying and convincing the relevant authorities on the importance and need for this fund.”
Government has made the effort to accommodate the taxi industry which remains the largest carrier of commuters with “86% of commuters transported daily”.
In considering the support that government has outlaid to the industry, Mbalula said government had noted that the taxi industry had operated at less than 60% of its size, which led to massive losses in income.
This led to a one-off exgratia payment to the industry of R1 billion. Relief will only be accessible to operators with valid operating licences.
“The relief support process has provided an opportunity to advance the formalisation of the taxi industry. This process is a subject of an ongoing engagement with the leadership structures of the taxi industry.
“We have taken note of the objections of the taxi industry to the effect that the relief support and the formalisation processes should be de-linked. The taxi industry has made representations to us that they are vehemently opposed to the conditions set down for access to the relief support.”
The conditions set down by government include the following:
• The taxi operations must be formally registered as a business entity;
• The registered business must have a business banking account into which the relief allowance will be paid into;
• These businesses must be registered for income tax and other applicable taxes related to running a business in South Africa.
• The registration process also includes registration of employee(s) with the Unemployment Insurance Fund (UIF), the Compensation Commission and for the Skills Development Levy; and
• They must be in possession of a valid operating licence or a receipt as proof of application for an operating licence. Such receipts must have been issued before 28 February 2020.
Rail
Long distances rail company Shosholoza remains closed in Level 3. Gautrain services are open and metro rail services are expected to resume soon.
From the 15 of July, we’re back in business, said Mbalula on airlines.
R500 billion was announced by President Cyril Ramaphosa to provide aid to different sectors and he confirmed it has been rolled out mostly to SMMEs and informal businesses.
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