ADDITIONAL TAX RELIEF MEASURES ANNOUNCED
The President addressed the nation on the 21st of April and announced additional tax relief measures to the Draft Disaster Management Tax Relief Bill that was published on 1 April.
The Minister of Finance will provide in-depth details on the announcement by the President in due course, but the headlines of the new proposals are as follows:
- Firstly the turnover threshold for business to qualify for the existing tax relief (PAYE and provisional tax deferral) will be increased to R100 million per year from the previous R50 million per year.
- The previously announced deferral of PAYE payments of 20% will be increased to 35%.
- In addition, the deferral scheme will be extended to SDL contributions so that all SDL contributions will be deferred for 4 months.
- All taxpayers will benefit from remission of penalties for late payment of all taxes if they can show they have been materially negatively impacted in this period of the COVID-19 pandemic.
- Businesses with a turnover of more than R100 million a year can apply directly to SARS on a case-by-case basis for deferrals of their tax payments.
- Taxpayers who make donations to the government operated Solidarity Fund will be entitled to an additional 10% Section 18A deduction from their taxable income.
- During this period SARS will fast track VAT refunds, but no announcement of VAT relief was made.
- There will also be a 3 month delay for Carbon Tax submissions and payments.
In total these additional tax relief measures should provide at least R70 billion in cash flow or direct payments to taxpayers.
Once the Minister of Finance provides further detail on the above measures, we will communicate the amendments to the Draft Disaster Management Tax Relief Bill to our clients.