South Africa’s taxi industry and e-hailing services have been identified as priority sectors in efforts to broaden the country’s tax base, Finance Minister Enoch Godongwana has said.
Godongwana said the South African Revenue Service (SARS) had identified businesses operating in the informal economy as an area requiring greater attention as government seeks to improve tax compliance and increase revenue collection.
In a written parliamentary response, the Finance Minister said the objective was not only to enforce compliance but also to help more businesses register, understand their tax obligations and pay the taxes they owe.
Taxi and e-hailing operators under scrutiny
According to Godongwana, the taxi industry, including e-hailing services, has been identified as a priority sector as part of SARS’s informal economy and compliance drive.
SARS is expected to use a combination of risk assessments, available information and targeted interventions to identify businesses that may not be registered or are not meeting their tax obligations.
The approach will also include taxpayer education, with operators being provided with information aimed at helping them understand their responsibilities under the tax system.
Third-party data to identify non-compliance
Godongwana said SARS would also make use of third-party and transactional data to identify potentially unregistered or non-compliant operators.
The increased use of data is intended to give SARS a clearer picture of economic activity and help the revenue service identify businesses that may fall outside the formal tax system.
Targeted compliance and enforcement campaigns will form part of the measures directed at taxi and e-hailing operators.
Government seeks to broaden tax base
The move forms part of broader government efforts to expand South Africa’s tax base by improving compliance rather than relying solely on existing taxpayers.
Godongwana said SARS’s interventions would combine enforcement with taxpayer education and registration initiatives, particularly within the informal economy.
The focus on the taxi and e-hailing sectors comes as these industries play a significant role in South Africa’s transport system and provide livelihoods for large numbers of operators and drivers.
For operators, the increased scrutiny means that businesses may need to ensure they are properly registered and meeting their tax obligations as SARS expands its compliance efforts.
Godongwana’s parliamentary response signals that the taxi and e-hailing industries are likely to remain firmly on SARS’s radar as government seeks to strengthen tax collection and broaden the country’s revenue base.