TAX Specialist
Reacting swiftly to the COVID-19 pandemic, President Cyril Ramaphosa on 23 March announced an initial 21-day lockdown period. The announcement came with tax relief that will assist businesses impacted by the lockdown.

Muneer Hassan CA(SA) Tax Consultant, Senior Lecturer in Taxation at UJ and Lecturer on the Gauteng Board Course
On 1 April, a revised Draft Disaster Management Tax Relief Bill covering the relief measures referred to in the President’s second announcement was published for comment by 15 April. Some of the tax relief measures (as at the time of writing) are summarised below.
Employment tax incentive (ETI)
The ETI will be expanded for four months (beginning on 1 April 2020 and ending on 31 July 2020). The R1 000 maximum relief for eligible employees (in the first year of employment) will be increased to R1 750 and the R500 relief (in the second year) will be increased to R1 250. The ETI will be expanded during this period and can be claimed in respect of any employee under the age of 65. ETI reimbursement payments will be accelerated from twice a year to monthly. The expansion only applies to registered employers as at 1 March 2020.
PAYE
Tax relief will be granted to small or medium-sized businesses with an annual turnover not exceeding R100 million for four months (beginning on 1 April 2020 and ending on 31 July 2020). These employers can defer 35% of the PAYE liability with no penalties and interest. The deferred payment must be paid to the South African Revenue Service (SARS) in equal instalments over six months commencing on 1 August 2020 (that is, the first payment is due on 7 September 2020).
Provisional tax
Tax relief will be granted to small or medium-sized businesses for 12 months (beginning on 1 April 2020 and ending on 31 March 2021). The first provisional tax payments, which are due from 1 April 2020 to 30 September 2020, will be based on 15% of the estimated total tax liability. The second provisional payments, due from 1 April 2020 to 31 March 2021, will be based on 65% of the estimated total liability. The deferred payments must be made when making the third provisional tax payment to avoid penalties and interest.
Funds established to assist with COVID-19 relief measures
The tax treatment of these funds will be similar to the special tax dispensation applicable to public benefit organisations (PBOs) that provide disaster relief.
Draft Bill
It must be noted that the relief measures outlined were based on the Bill which was still in draft stage at the point of writing this article. Refinements may have been made to the final legislated Act and must be taken into account. Even though some relief has been made in relation to VAT on imported goods and exports, the zero rate basket remains unchanged. Perhaps this is an area where further relief must still be considered − zero-rating of hand sanitisers, masks, gloves, canned foods, etc.
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