The Minister of Finance announced the following exceptional tax measures on 29 March 2020. These have been summarised below by Somaya Khaki (Project Director: SAICA Tax). Please also consult the Explanatory Memorandum and Media statement (links provided at the end of the mailer below) which includes background, detailed requirements and examples. The draft bills alongside their draft explanatory memorandum, will be published for public comment on the National Treasury and SARS websites by 1 April 2020.
Employment Tax Incentive (“ETI”) Relief (1 April – 31 July 2020):
- Increasing max ETI currently claimable from R1 000 to R1 500 in the 1st qualifying 12 months and from R500 to R1 000 in the 2nd 12 qualifying months.
- Allowing monthly ETI claim of R500 for employees from the ages of: 18 to 29 who are no longer eligible for the ETI as the employer has claimed ETI in respect of those employees for 24 months; and 30 to 65 who are not eligible for the ETI due to their age.
- Accelerating the payment of ETI reimbursements from twice a year to monthly to improve cash flow.
Deferral of portion of PAYE liability (1 April – 31 July 2020):
- Deferral of payment of 20% of PAYE liability, without interest/penalties for late payment.
- The deferred PAYE liability must be paid o SARS in equal instalments over the 6-month period commencing on 1 August 2020; i.e. the first payment must be made on 7 September 2020.
Deferral of portion of provisional tax liability for compliant SMMEs (1 April 2020 – 31 March 2021):
- Deferral of a portion of the 1st & 2nd provisional tax payment, without penalties & interest for late payment thereof;
- 1st provtax payment due from 01/04/20 – 30/09/20 = 15% x estimated total tax liability
- 2nd provtax from 01/04/20 – 31/03/21 = 65% x estimated total tax liability;
Balance to be paid by third provisional tax payment date in order to avoid interest charges.
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