Tax Relief Measures

Dear Clients,

Please find attached (see links below) the Media Statement and Explanatory Notes regarding the COVID-19 tax relief measures announced by the President last week.

Somaya Khaki (Project Director: SAICA TAX) has prepared the below summary, but there are obviously important details in the attached documents. It is unclear as to when comments are due on these proposals.

COVID-19 TAX RELIEF MEASURES


The Minister of Finance released details on the proposed tax relief measures (for compliant taxpayers) announced by President Ramaphosa last week Monday. These are summarised below, but please read the Draft Explanatory Memorandum which includes the background, detailed requirements and examples.

ETI Relief (1 April – 31 July 2020):

  • Increasing max ETI currently claimable from R1 000 to R1 500 in the 1st qualifying 12 months and from R500 to R1 000 in the 2nd 12 qualifying months.
  • Allowing monthly ETI claim of R500 for employees from the ages of: 18 to 29 who are no longer eligible for the ETI as the employer has claimed ETI in respect of those employees for 24 months; and 30 to 65 who are not eligible for the ETI due to their age.
  • Accelerating the payment of ETI reimbursements from twice a year to monthly to improve cash flow.

Deferral of portion of PAYE liability (1 April – 31 July 2020):

  • Deferral of payment of 20% of PAYE liability, without interest/penalties for late payment.
  • The deferred PAYE liability must be paid o SARS in equal instalments over the 6 month period commencing on 1 August 2020; i.e. the first payment must be made on 7 September 2020. 

Deferral of portion of provisional tax liability for compliant SMMEs (1 April 2020 – 31 March 2021): 

  • Deferral of a portion of the 1st & 2nd provisional tax payment, without penalties & interest for late payment thereof; 
  • 1st provtax payment due from 01/04/20 – 30/09/20 = 15% x estimated total tax liability
  • 2nd provtax from 01/04/20 – 31/03/21 = 65% x estimated total tax liability; 

Balance to be paid by third provisional tax payment date in order to avoid interest charges.

Click on the link below to download the following:

1.     Media Statement
2.     Explantory notes on the COVID-19 tax measures