Taxi drivers and marshals in South Africa could potentially gain increased employment guarantees and improved working conditions as the industry moves towards formalization amid increased scrutiny from SARS.
Previously, the Ministry of Finance announced that the South African Revenue Service (SARS) is intensifying efforts to broaden the country's tax base by including more businesses from the informal sector into the tax system.
The taxi industry, including ride-hailing services, has been identified as a priority sector. SARS uses data analysis, risk assessment, targeted interventions, and taxpayer education to improve registration, reporting, and tax compliance.
However, the organization SANTACO emphasized that the industry already contributes to tax revenue, as many taxi businesses operate as sole proprietorships where operators pay taxes as individuals.
SANTACO on Formalization
A representative from SANTACO, Mmatsikhidi Rebecca Fala, told IOL that most taxi businesses operate as sole proprietorships, and individual operators pay taxes in this capacity.
The organization noted that the decision for corporatization and formalization, made in 2020, aimed to transition the industry to a more structured business model. Fala added that formalization could benefit drivers, marshals, and other sector workers by creating a more orderly employment environment.
The shift to a corporate structure will allow taxi businesses to register drivers, marshals, and other members of the taxi ecosystem in a formalized manner. Fala explained that this would enable workers to receive benefits and protections stipulated by South African labour law.
What This Could Mean for Workers
For employees, formalization can have tangible consequences. With official employment, a driver or marshal may be entitled to adherence to minimum labour standards regarding working hours, leave, employment contracts, wages, and dismissal.
Depending on the employment format, formally employed staff may be covered by the Unemployment Insurance Fund (UIF), and those affected by occupational diseases or injuries may claim compensation under the Compensation for Occupational Injuries and Diseases Act (COIDA).
Thus, formal employment will provide drivers and marshals with greater clarity regarding who employs them, how they are paid, and what types of workplace protection are available to them. However, formalization itself does not guarantee automatic access to these benefits for every worker; available guarantees depend on the nature of the employment relationship and compliance with relevant legal requirements.