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The government’s plan to ‘formalize’ and regulate taxis in South Africa

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Transport Minister Fikile Mbalula has created a national relief fund for taxi and telephone operators, to offer support after the impact of the Covid-19 pandemic. But to qualify, operators will have to submit to more stringent regulations.

First ad as of June 2020, the relief fund is not compensation for loss of income due to foreclosure restrictions, but rather part of general public assistance.

However, the directive also aims to formalize the taxi sector, applicants must meet a number of strict conditions before qualifying for funding.

“This relief must be considered through the long-term vision of the opportunity created by the Covid-19 pandemic to achieve (the) long-term sustainability of the industry through formalization and ultimately the subsidy”, Mbalula said when the fund was first announced.

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“We have to subsidize the taxi industry. With none of the rail services operational, everyone relies on the taxi industry to get to work. We have to understand the subsidy in this context. “

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To benefit from the relief fund, taxi operators must be:

  • A South African citizen or a permanent resident of the republic;
  • In possession of a valid business license or business permit or receipt as proof of application for renewal of a business license;
  • The association to benefit from the relief fund for taxis must be a registered association within the meaning of the national law on the transition of land transport.

To benefit from the emergency fund, electronic telephone operators must be:

  • A South African citizen or a permanent resident of the republic;
  • In possession of a valid business license or professional driver’s license.

Additional conditions

In addition to the above requirements, the directive states that the following conditions must also be met in order to receive funding:

  • At the start of the national lockdown, the taxi driver must be in possession of a license or operating permit and have operated for the previous 180 days;
  • The taxi operation must be officially registered as a business entity;
  • The business must be registered for income tax and other applicable taxes related to operating a business in South Africa;
  • The registration process should also include the registration of employees with the Skills Development Tax (SDL), Unemployment Insurance Fund (UIF), Workers’ Compensation, Sickness and Welfare. death (COIDA) as well as respect for the sectoral determination of wages by the Minister of Labor. ;
  • The taxi operator must transfer the license or operating permit to the name of the company;
  • The email driver must be registered for income tax;
  • Funds to be paid only to the professional account.
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Beyond these conditions, all taxi operators will be required to transfer their operating licenses to commercial entities within seven years from the date of filing the request for relief funds for taxis.

The taxi operator must ensure that within two years from the date of filing the request, the employees exercising his job will be registered in the name of the company formed and registered with the Unemployment Insurance Fund.

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In the case of cars, minibuses and midibuses that are still financed, the taxi operator must ensure that within 5 years they pass from the owner to the company.

The deadline for the application of the taxi assistance fund is September 30, 2021.

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