South Africa: Additional tax relief measures announced in response to COVID-19 

On 21 April 2020, President Cyril Ramaphosa announced additional tax relief measures as part of government’s so-called “second phase” to its economic response to stabilise the economy as part of its fight against the coronavirus (COVID-19) pandemic. In addition to the tax measures announced on 23 March 2020, the following relief measures were announced:

  • A four-month holiday for companies’ skills development levy contributions.
  • The fast-tracking of outstanding value-added tax refunds.
  •  A three-month delay in the filing and first payment obligation of carbon tax.
  •  The previously announced tax turnover threshold for tax deferrals will be increased to R100 million and the proportion of Pay As You Earn (PAYE) that can be deferred will be increased to 35%. Accordingly, tax compliant businesses below the R 100 million turnover threshold will be allowed to delay 35% of their PAYE liabilities over the next four months. Businesses with a turnover of more than R100 million a year can apply directly to the South African Revenue Service (SARS) on a case-by-case basis for deferrals of their tax payments. It is expected that SARS will not be imposing penalties for late payments of taxes provided it can be shown that the taxpayer has been materially impacted as a result of the lockdown measures.
  • Taxpayers who donate to the Solidarity Fund (a funding vehicle established by government for COVID-19 related contributions) will be able to claim up to an additional 10% as a deduction from their taxable income.

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