These SA tax payers will get a windfall of R500 a month until July

As part of a raft of new emergency measures to prop up the economy during the coronavirus crisis, President Cyril Ramaphosa has announced special interventions to help businesses, and a windfall for some individual taxpayers.

Four million South African workers who earn less that R6 500 a month will get an amount of R500 over the next four months (from April to July). Details are yet to be announced, but it will is expected to be in the form of a wage subsidy via employers.

Four million South African workers who earn less that R6 500 a month will get an amount of R500 over the next four months (from April to July). Details are yet to be announced, but it will is expected to be in the form of a wage subsidy via employers.

Tax-compliant businesses with a turnover of less than R50 million will be allowed to delay 20% of their pay-as-you-earn 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.

More than 75 000 small and medium-sized businesses are expected to benefit from these interventions.

The South African Revenue Service (Sars) will also pay out employment tax incentive reimbursements every month – instead of twice a year – “to get cash into the hands of compliant employers as soon as possible”, Ramaphosa said.

Government is also in consultation to pay wages of employees in struggling companies through the Temporary Employee Relief Scheme, which will avoid retrenchments.

Ramaphosa added that the temporary reduction of employer and employee contributions to the Unemployment Insurance Fund (UIF) and employer contributions to the Skill Development Fund are also being considered.

He confirmed that “in the event that it becomes necessary”, the UIF reserves will be used to help workers in small businesses and “other vulnerable firms” who are faced with loss of income and whose companies are unable to provide support.

The UIF has assets of about R180 billion and both Cosatu and Business Unity South Africa have pressured government to use the money to help workers in need.

Any employee who falls ill through exposure at their workplace will be paid through the Compensation Fund, he added.

Commercial banks have been exempted from provisions of the Competition Act to enable them to develop common approaches to debt relief, it was announced.

On Sunday, Standard Bank announced that it is extending three-month debt repayment holidays to all businesses with an annual turnover of less than R20 million.

 

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