R1.135bn relief for country’s “unhappy” taxi industry

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The government would be providing taxi operators with a once-off ex-gratia payment for losses incurred during the lockdown.

This was announced on Friday by the Transport Minister Fikile Mbalula, who said the R1.13bn which was set aside for this was not compensation, but rather assistance from government.

It would amount to around R5000 per taxi.

Mbalula said this relief must also be considered as an opportunity to achieve long-term sustainability of the industry through formalisation and ultimately subsidisation.

“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,” he said in a lengthy statement.

Minister Mbalula said that government had noted 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.”

These 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 License or a receipt as proof of application for an operating licence. Such receipts must have been issued before 28 February 2020.

Mbalula said 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. 

“We will open our electronic gateways on eNatis (electronic National Traffic Information System) and Olas (Operating Licence Administration System) systems to SARS to enable them to validate vehicle and operating licence information, as part of this process to ensure that there is no fraud in the distribution of funds to beneficiaries,” the Minister said.

Mbalula said this was “amongst the largest relief packages for any economic sub-sectors provided for by government.”

“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,” he said.

“Most of the special relief funds for sub-sectors provides on average maximums of about R350m in comparison to what’s on offer the taxi industry.

 Minister Mbalula said that the taxi industry has further requested that the Department of Transport to review the regulations and Directions to allow for the loading capacity to be increased from the current 70% to a 100% with all passengers wearing masks and with regular sanitisation of vehicles after each journey as mitigation measures.

However, he said this was not a matter that the Department of Transport could finalise on its own and will need to be discussed by the NATJOINTS and the National Coronavirus Command Council for its consideration and then a response will be provided to the Taxi Industry.

Mbalula said funding would also be made available for each of our Departmental Public entities adversely impacted by this pandemic.