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

President Cyril Ramaphosa announced tax relief measures, which will apply to certain employers during the next few months, in response to the coronavirus (COVID-19).

In a statement made by President Cyril Ramaphosa on 23 March 2020, the below tax relief measures, which will apply to certain employers during the next few months, were announced:   

  • Government 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. The Employment Tax Incentives Act, 2013 encourages the employment of young workers and provides relief to qualifying employers by means of a reduction of monthly employees’ tax.
  • It was also announced that the South African Revenue Service will 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 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. Note that this is only a delay of the relevant employees’ tax and provisional tax obligations and not a reduction.

Government is also exploring the temporary reduction of employer and employee contributions to the Unemployment Insurance Fund and employer contributions to the Skills Development Fund. We expect tax law addressing the above proposals to be published shortly.

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Public authorities are taking decisive action to respond to the emerging health threat and the business community is having to reconsider the adequacy of their preparedness measures. To support and assist you in promoting continuity of operations, we have put together the following tools:

  • Visit www.deloitte.com/COVID to access and read our insights on Combating COVID-19 with resilience, and how businesses can manage and mitigate risk.
  • Sign up for our COVID-19 Tax Alerts: 

In collaboration with Signal AI, we are helping clients stay up to date on tax developments real-time using the latest technology to surface daily alerts on a variety of topics. We harness the huge amount of data available on-line, and with complex tax trained AI filters we are able to surface relevant information about new tax developments around the globe, cutting through the mass of other noise. To sign up for the alert, please send an email to signal@deloitte.com and indicate“COVID-19 Tax Alert” in the subject line. In the body of the email, indicate your interest, and the frequency (e.g. daily, weekly, etc.), of receiving the COVID-19 Tax Alert as well as include your full name, company name and email address.

 

Need help? Connect with our Africa Tax & Legal Technical Council at zataxandlegaltech@deloitte.co.za.

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