COVID-19 amended tax relief measures in South Africa

On 21 April 2020 President Cyril Ramaphosa announced the implementation of significant social relief and economic support measures in South Africa which are required as a result of the impact of COVID-19.

This will involve a total package of R 500 billion, amounting to approximately 10% of the country’s gross domestic product, and highlights how significantly the pandemic is impacting South Africa at both social and economic levels.

As part of this relief package, in addition to the existing tax relief measures, certain additional and amended tax relief measures were also announced.

These are as follows:

  • A four month holiday for company’s skills development levies.
  • The fast tracking of VAT refunds.
  • The current PAYE payment deferral of 20% has been increased to 35%.
  • The current turnover threshold of R 50 million for companies to qualify for the deferral of payment of provisional taxes and PAYE has been increased to R 100 million.
  • In addition, businesses whose turnover thresholds are greater than R 100 million can apply on a case by case basis for deferral of provisional tax payments to apply.
  • The tax claim of donations to the Solidarity Fund has been increased by an additional 10% of taxable income.
  • A 3 month delay for filing and the first payment of carbon tax.

The specific details surrounding these tax relief measures will be further clarified by the Minister of Finance over the next few days.

We would also advise businesses that the relief measures through the Unemployment Insurance Fund (“U.I.F.”) are still in place, and as per President Ramaphosa’s speech have to date paid out in excess of R 1.6 billion.

What is important to note, as regards the U.I.F. benefits, is that applications should be made before the lockdown period terminates otherwise entities may not qualify for said.

John Jones

Director Corporate and International Tax Johannesburg

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