In addition to existing tax relief measures, the South African government will also introduce a four-month holiday for companies’ skills development levy contributions, fast-tracking VAT refunds and a three-month delay for filing and first payment of carbon tax.
To assist more businesses, the previous turnover threshold for tax deferrals is being increased to R100 million a year, and the proportion of PAYE payment that can be deferred will be increased to 35 percent.
Businesses with a turnover of more than R100 million a year can apply directly to SARS for deferrals of their tax payments.
“No penalties for late payments will be applicable if they can show they have been materially negatively impacted in this period,” said President Ramaphosa last night.
Additionally, taxpayers who donate to the Solidarity Fund will be able to claim up to an additional 10 percent as a deduction from their taxable income.
In total these tax measures should provide at least R70 billion in cash flow relief or direct payments to businesses and individuals.
The Finance Minister is expected to flesh out further details on the tax-related announcements when he tables the adjusted budget.
Re-opening of the economy
The fourth area Cabinet deliberated on was the phased re-opening of the economy.
The President said the reopening of the economy will follow a risk-adjusted approach, balancing the continued need to limit the spread of the coronavirus with the need to get people back to work.
“As we do so, we remain firm in our resolve to contain the transmission of the virus. We will therefore need to act with agility and flexibility in the weeks and months ahead, and respond to the situation as it develops,” he said. – SAnews.gov.za