In light of the current COVID-19 pandemic, President Cyril Ramaphosa announced certain relief measures in an attempt to provide for the wellbeing of the people of South Africa and navigate our already troubled economy through these uncertain times.
In order to assist with alleviating cash flow burdens arising as a result of the COVID-19 outbreak, Government has instituted the deferral of a portion of employees’ tax payments, as well as provisional tax liabilities to SARS, without SARS imposing administrative penalties and interest for the late payment of the deferred amount.
Important to note: These tax relief measures will only apply to qualifying taxpayers which is defined as:
A company, trust, partnership or individual —
However, interest and penalties will apply in instances where, upon assessment, it is discovered that a taxpayer does not qualify for relief under the proposed amendments.
FURTHER TAX MEASURES TO COMBAT THE COVID-19 PANDEMIC
The following set of additional measures have also been implemented and will help businesses focus on staying afloat and paying their employees and suppliers.
Skills development levy holiday: From 1 May 2020, there will be a four-month holiday for skills development levy contributions to assist all businesses with cash flow.
Fast-tracking of value-added tax (VAT) refunds: VAT vendors that are in a net refund position will be temporarily permitted to file monthly instead of once every two months, thereby unlocking the input tax refund faster and immediately helping with cash flow.
An increase in the expanded employment tax incentive amount: The tax measures provide for a wage subsidy of up to R750 per month for each employee that earns less than R6 500 per month.
Case-by-case application to SARS for waiving of penalties: Larger businesses (with gross income of more than R100 million) that can show they are incapable of making payments due to the COVID-19 disaster, may apply directly to SARS to defer tax payments without incurring penalties. Similarly, businesses with gross income of less than R100 million can apply for an additional deferral of payments without incurring penalties.
We invite you to contact our Tax Department should you have any further inquiries regarding any tax relief measures. You can contact us at 021 840 1600 / firstname.lastname@example.org.