BL Premium reports that the national transport department, which is battling the vandalism and looting of SA’s rail infrastructure, says it will reprioritise its already reduced budget allocation to implement an ambitious subsidy scheme for the R5bn taxi industry by April 2021.
The government has dangled the subsidy in a bid to formalise and regulate the taxi industry. Last week President Cyril Ramaphosa said formalising the industry, which transports 16.5-million passengers a day, was a vital step towards ensuring its contribution to the national tax revenue base. But Econometrix chief economist Azar Jammine doubted the government would be able to fund the subsidy scheme. He said that implementing a taxi subsidy was a “sign people within government don’t seem to understand the incredible financial predicament we find ourselves in”. The government is cash strapped and has had to cut budget allocations for 41 departments to raise the R10.5bn embattled SA Airways needs to implement its business rescue plan. The transport department lost R681m in the exercise. But, Transport Minister Fikile Mbalula gave an undertaking during the national taxi summit at the weekend that a subsidy for the industry would be introduced by April 2021. The government already subsidises rail and bus transport, including private bus operators. On Tuesday, Mbalula’s spokesperson said the department would reprioritize its budget to “accommodate a subsidy for the taxi industry”. It is not known what form the subsidy will take.
- Read the full original of the report in the above regard by Luyolo Mkentane at BusinessLive (paywall access only)
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