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COVID-19 Taxi Relief Support Under the Spotlight

June 23, 2020

Department of Transport

Government has agreed to provide relief to the taxi industry in the form of a once-off ex gratia payment to taxi operators.

The transport minister, Fikile Mbalula, confirmed this in a statement on taxi relief support and economic stimulus for transport entities.

The minister emphasized that the relief is not compensation for loss of revenue as a result of the COVID-19 lockdown but rather assistance by government within the available resources and means.

“This relief must be equally looked at through a long-term view of the opportunity created by COVID-19 pandemic to achieve long-term sustainability of the industry through formalization and ultimately subsidization.”

A relief package of R1,135 billion has been offered.

Reasons that government took into consideration in evaluating the negative impact of COVID-19 on the taxi industry include a 30% reduction in loading passenger capacity; prohibition of inter-provincial travel and the closure of the border and restricted operating times for taxis and the targeted transportation of essential workers during the lockdown level 5.

In essence, the taxi industry was operating less than 60% of its fleet size and carried 30% less of its licensed carrying capacity.

In addition, almost 20% or more of the taxi industry experienced total loss of income.

The plan is for Taxi Relief Support to be accessible to all taxi operators, to focus on legal taxi operators with valid operating licenses, to be based on each permit and to be an all-inclusive relief scheme that will also cover owners, drivers, rank managers, marshals and other taxi associations workers.

Conditions include taxi operations to be formally registered as a business entity; have a business banking account, registered for income tax and be in possession of a valid operating license or a receipt, issued before 28 February 2020, as proof of application for an operating licence.

The date on which relief payments will get underway will be announced in due course.

Meanwhile, in response yesterday to the Gauteng Provincial arm of the South African National Taxi Council announcement of a planned shutdown for today, the department described the action as “rather unfortunate and counterproductive”.

“Resorting to shutting down services as an expression of disagreement with the quantum of the amount the government is offering the industry as relief support, does nothing for the industry.”

The department highlighted that no more money is available beyond what the government has offered to assist the taxi industry.

The department plans to discuss the taxi industry concerns within government and provide feedback to the industry on 24 June 2020.

Directions will then be issued to formalize the process and give clear guidance on how the relief benefit can be accessed.

The department also confirmed that “SA Taxi Finance will put a moratorium in place on vehicle repossessions and also extend their initial one-month repayment holiday by a further two-months”.