As part of a swift and extraordinary action to deal with coronavirus, President Cyril Ramaphosa announced measures to assist businesses that may be in distress and a windfall for some individual taxpayers.
“Using the tax system, we will provide a tax subsidy of up to R500 per month for the next four months for those private-sector employees earning below R6,500 under the Employment Tax Incentive,” said Ramaphosa.
He added that this will help over 4 million workers.
The South African Revenue Service will also work towards accelerating 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 less than R50 million will be allowed to delay 20% of their pay-as-you-earn 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,” said Ramaphosa. “This intervention is expected to assist over 75 000 small and medium-term enterprises.”
The Government is also exploring the temporary reduction of employer and employee contributions to the Unemployment Insurance Fund and employer contributions to the Skill Development Fund.
While, the Department of Small Business Development has made over R500 million available immediately to assist small and medium enterprises that are in distress through a simplified application process.
The Industrial Development Corporation has put a package together with the Department of Trade, Industry and Competition of more than R3 billion for industrial funding to address the situation of vulnerable firms and to fast-track financing for companies critical to our efforts to fight the virus and its economic impact.
The Department of Tourism has made an additional R200 million available to assist SMEs in the tourism and hospitality sector who are under particular stress due to the new travel restrictions.