SA Treasury introduces tax subsidies among measures to mitigate impact of Covid-19
South Africa's Treasury announced a tax subsidy for some employers, among measures to mitigate the impact of the Covid-19 pandemic on the economy.
In a statement on Sunday, the Treasury said the measures, effective from April 1, were over and above the tax proposals made in the 2020 budget review last month, and were made in light of the national state of disaster declared by President Cyril Ramaphosa "and due to the significant and potentially lasting negative impacts on the economy from the spreading of the COVID-19 virus"
"There is a critical need for government interventions to assist with job retention and assist businesses that may be experiencing significant distress," the department said.
The Treasury is introducing a tax subsidy to employers of up to R500 per month for the next four months for those private sector employees earning below R6 500. It said this would help over four million workers.
In addition, the South African Revenue Service will accelerate the payment of employment tax incentive reimbursements from twice a year to monthly to get cash into the hands of compliant employers as soon as possible.
"Tax compliant businesses with a turnover of R50-million or less will be allowed to delay 20 percent of their employees’ tax liabilities over the next four months and a portion of their provisional corporate income tax payments without penalties or interest over the next six months," said the Treasury.
"This intervention is expected to assist 75 000 small and medium term enterprises."
In addition to the human toll of the pandemic, small businesses in particular are likely to take a severe economic hit from a 21-day lockdown announced by Ramaphosa to try and curb the spread of the coronavirus which has infected 1 280 people in South Africa, with two losing their lives.
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