Written by: Ayman Ragab
The Cape Town Democratic Taxi Association (CODETA) in South Africa has announced the launch of a new cashless payment system, which is scheduled to be launched on June 1st.
Under this new system, passengers will be required to use cards that will be scanned when they enter taxis.
Installing cameras inside taxis
“We are introducing a new electronic payment system in our taxi sector. Our customers will now use cards that they scan when they get into our cars,” said Codita Chairman, Nesiba Inge.
He said: “By doing that, we are also trying to protect them in the morning when they go to work and when they return home.”.
Eng said cameras will be installed inside taxis as part of the new system to enhance safety and accountability within the sector.
He realized that the transition to this new technology might present challenges during the initial stages of implementation.
Positive development
While some passengers welcomed the introduction of the system, concerns remain about how it will work in practice.
Isithu Saliva, a taxi passenger, described the introduction of the new payment system as a positive development, noting that similar systems are already in use in other forms of public transport.
But she acknowledged that passengers might initially find it difficult to plan for taxi fares using cards instead of cash.
She urged taxi drivers to be patient with passengers as they adjust to the new system.
“These systems will face challenges, and sometimes the devices may not be able to scan… Taxi drivers must be careful and patient with passengers,” Saliva said.
taxi tax
The annual revenue of the taxi sector in South Africa is estimated to be between 90 billion and 100 billion rand, yet it pays almost no taxes.
In March 2025, Wayne Duffing, CEO of the anti-tax abuse organization Outa, stated that regulating and taxing the taxi industry could significantly increase state revenues.
He stressed that including the taxi sector in the tax framework, which is currently excluded, would help to broaden South Africa’s tax base.
He said: “The goal is not to punish the taxi sector, but to say that you are organized, that you are companies, and that you must be subject to oversight.”.
The CEO of Outa stated that there is no good reason for the taxi sector in South Africa, which operates mainly on a cash basis, to remain without taxes.
His remarks are consistent with the position of the Democratic Alliance, which highlighted in 2021 that this lucrative sector contributes only 5 million rand in taxes.
A low rate of tax compliance in the small taxi sector in South Africa was revealed in response to a parliamentary question from the Democratic Alliance party.
modest taxes
The Democratic Alliance party said: “The finance minister revealed that only about 5 million rand in taxes are being collected from the entire small taxi sector.”.
“This means that the vast majority of taxi operators and owners do not declare any corporate tax income at all and do not pay payroll tax to their drivers and employees.”
Underreporting income and evading taxes is against the law. This act constitutes a crime under the Tax Administration Amendment Act, and its penalty may be imprisonment for up to two years.
The Democratic Alliance (DA) has urged the South African Revenue Service (SARS) to take action against tax evaders in the taxi sector, to ensure that this sector contributes its fair share of taxes.
A large portion of the fare that taxi drivers receive is paid in cash, resulting in minimal financial documentation of their operations.
This situation makes it difficult for the South African Revenue Service (SARS) to determine the operators' profits and the amount of tax they have to pay.
