budget deficit

The Finance Minister Tito Mboweni has announced exceptional tax measures from 1 April to counter the impact of the Coronavirus pandemic, including a tax subsidy to certain employers and the easement of some tax payments.

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The Ministry of Finance said in a statement that there was a critical need for government interventions to assist with job retention and assist businesses that may be experiencing significant distress.

The tax measures include:

  • The introduction of a tax subsidy to employers of up to R500 per month for the next four months for private sector employees earning below R6 500 under the Employment Tax Incentive. This will help over 4 million workers.
  • The South African Revenue Service (SARS) will accelerate the payment of employment tax incentive reimbursements from twice a year to monthly to get cash into the hands of compliant employers as soon as possible.
  • Tax compliant businesses with a turnover of R50 million or less will be allowed to delay 20% of their employees’ tax liabilities over the next four months and a portion of their provisional corporate income tax payments without penalties or interest over the next six months. This intervention is expected to assist 75 000 small and medium term enterprises.

“Together with the Commissioner of SARS, National Treasury will also be considering additional exceptional adjustments to assist with COVID-19 relief efforts and to the tax treatment of newly formed funds in this regard,” said the ministry.

The draft explanatory notes regarding the COVID-19 tax measures can be found on the National Treasury (www.treasury.gov.za ) and SARS (www.sars.gov.za ) websites.

Comments on the draft explanatory notes can be made to 2020AnnexCProp@treasury.gov.za.

Source: SAnews.gov.za