Tax Relief from SARS

Refer to the SARS website for the latest updates at www.sars.gov.za/Media/Pages/CoronaVirus.aspx

Employee Tax Incentives (ETI)

To minimise the loss of jobs during this critical period, SARS will expand the ETI programme for a limited period of 4 months, beginning 1 April 2020 and ending 31 July 2020 as follows:

    • Increasing the maximum amount of ETI for current employees under the ETI Act from R1,000 to R1,500 in the first qualifying 12 months, and from R500 to R1,000 in the second qualifying 12 months for employees earning below R6,500 per month.
    • Allowing a monthly ETI claim to the amount of R500 for employees from the ages of:
      • 18 to 29 who are no longer eligible for ETI as the employer has claimed ETI in respect of those employees for 24 months.
      • 30 to 65 who are not eligible for the ETI due to their age.
  • Accelerating the payment of ETI reimbursements from twice per year to monthly as a means of getting cash back into the hands of tax compliant employers as soon as possible.
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Deferral of Pay-As-You-Earn (PAYE) Payments

To help alleviate any cashflow burden caused by the COVID-19 pandemic, the following tax relief measures have been implemented:

  • The deferral of 20% of the PAYE liability, without SARS imposing administrative penalties and interest for the late payment of the deferred amount.
  • These relief measures will be in place for a period of 4 months for the tax period April 2020 to July 2020.
  • The deferred PAYE liability is repayable to SARS in equal instalments over a 6-month period commencing 1 August 2020 (i.e. the first payment must be made on 7 September 2020).

Qualifying Criteria

  • Annual turnover may not exceed R50-million.
  • The business must be tax compliant.

Deferral of Provisional Tax

To help alleviate any cashflow burden caused by the COVID-19 pandemic, the following tax relief measures have been implemented:

  • The deferral of a portion of the payment of the first and second provisional tax liabilities to SARS, without SARS imposing administrative penalties and interest for the late payment of the deferred amount.
  • The first provisional payment due from 1 April 2020 to 30 September 2020 will be based on 15% of the estimated total tax liability.
  • The second provisional payment due from 1 October 2020 to 31 March 2021 will be based on 65% of the estimated total tax liability.
  • The deferred payments will be required to be paid in full when making the third provisional payment.

Qualifying Criteria

    • Annual turnover may not exceed R50-million.
  • The business must be tax compliant.

Value Added Tax (VAT)

It should be noted that no tax relief measures relating to VAT have been announced. The automatic 10% penalty will therefore still be applied to any late payment of VAT.

SARS did however announce a VAT exemption for essential goods on importation.

Due to the measures put in place under the Disaster Management Act 57 of 2002, “essential goods” as defined in Regulation R.398 in Government Gazette No 43148 of 25 March 2020 will be subject to a VAT exemption on importation during the COVID-19 pandemic, under Item 412.11/00.00/01.00 of Schedule 1 to the Value Added Tax Act 89 of 1991. A full rebate of customs duty under rebate item 412.11 of Schedule No. 4 to the Customs and Excise Act 91 of 1964 is available where ITAC has approved the rebate for the goods concerned.

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