Launch of taxi scrapping as part of revised Taxi Recapitalisation Programme

23 August 2019

At the dawn of our democracy, the first ANC Administration approved the final recommendations of the National Taxi Task Team, which set the scene for the introduction of the Taxi Recapitalisation Programme. The strategic objective of this programme is to address the underlying economic circumstances of the industry, where it finds itself on the fringes of the economy as a hand to mouth business unable to recapitalize itself. While the industry committed to formalize its operations and subject itself to regulation, government committed to a package of economic assistance interventions.It is for that reason that the Taxi Recapitalisation Programme remains the flagship of successive ANC Administrations and a demonstration of our commitment to uplifting the taxi industry.

At the heart of the programme is ensuring that vehicles used to ferry commuters meet the safety standards. In enabling the effective phasing out of unsafe vehicles and enabling introduction of those that meet the safety standards, government provides a capital susbsidy in the form of a scrapping allowance. This allowance is only accessed by those who voluntarily surrender their vehicles that meet a pre-defined criteria to be scrapped.

After a break of 1 year, we are pleased to announce the resumption of the scrapping of old taxi vehicles. The Department has appointed a company, Anthus Service 84, through a competitive bidding process, to provide operational management of the scrapping process and establish scrapping sites in all the Provinces. In repackaging the scrapping administration, we have ensured that the taxi industry directly benefits from this process.

The administration of this process will be undertaken through a special purpose vehicle, a company to be jointly owned by Anthus Service 84 and the taxi industry. The taxi industry will own 60% of this new entity and the proceeds derived from the project will be channeled to a Taxi Development Trust. The department is currently in negotiations with SANTACO, a taxi industry representative body, on the institutional arrangements that must ensure that every operator in the industry is able to benefit.

A total number of 1 464 applications for scrapping of old taxi vehicles have been received and processed to date. The process of scrapping 1 000 illegally converted panel vans has begun, and this will be followed by scrapping the other vehicles whose applications for scrapping have been successful.

Our commitment to uplifting the taxi industry has never wavered, and we are determined to create opportunities for them to grow their business. However, in doing so the industry must deliver on its end of the bargain and ensure their members adhere to regulation and contribute to the country’s tax base like any corporate citizen. The special purpose vehicle responsible for managing the scrapping process must be registered for tax and must equally pay its dues.

Issued by Ayanda Allie Paine on behalf of the Department of Transport, 23 August 2019