Mboweni announces second wave of tax measures to help South Africans - everything you need to know

In line with president Cyril Ramaphosa’s announcement of a R500 billion coronavirus relief package, National Treasury has published further details on its second set of measures that aim to assist individuals and businesses through the pandemic.

The measures will help businesses focus on staying afloat and paying their employees and suppliers, Treasury said.

“Assisting businesses now will ensure that our economy is in a better position to recover once the health crisis starts to subside.

“If businesses survive this testing time, the economy will be better placed to strive collectively towards economic growth that is inclusive (providing more opportunities for employment) and revenue-generating, so that we are able to work towards improving the state of our fiscus.”

It added that the measures are expected to provide around R70 billion in support, either through reductions in taxes otherwise payable, or through deferrals of tax payments for tax compliant businesses.

Treasury said that the above measures will be given legal effect in terms of changes to the Draft Disaster Management Tax Relief Bill and the Draft Disaster Management Tax Relief Administration Bill.

Together with the commissioner for SARS, National Treasury will also monitor developments and the need for any further requirements to assist with Covid-19 relief efforts, it said.

The interventions are outlined in more detail below:

Skills development levy holiday
From 1 May 2020, there will be a four-month holiday for skills development levy contributions (1% of total salaries) to assist all businesses with cash flow. This will provide relief of around R6 billion.

Fast-tracking of value-added tax (VAT) refunds
Smaller VAT vendors that are in a net refund position will be temporarily permitted to file monthly instead of once every two months, thereby unlocking the input tax refund faster and immediately helping with cashflow.
SARS is working towards having its systems in place to allow this in May 2020 for Category A vendors that would otherwise only file in June 2020.

Three-month deferral for filing and first payment of carbon tax liabilities
The filing requirement and the first carbon tax payment are due by 31 July 2020.
To provide additional time to complete the first return, as well as cash flow relief in the short term, and to allow for the utilisation of carbon offsets as administered by the Department of Mineral Resources and Energy, the filing and payment date will be delayed to 31 October 2020.

This will provide cash flow relief of close to R2 billion.

A deferral for the payment of excise taxes on alcoholic beverages and tobacco products
Due to the restrictions on the sale of alcoholic beverages and tobacco products, payments due in May 2020 and June 2020 will be deferred by 90 days for excise compliant businesses to more closely align tax payments through the duty-at-source system (excise duties are imposed at the point of production) with retail sales.
This is expected to provide short term assistance of around R6

Read the full article: https://businesstech.co.za/news/finance/392025/mboweni-announces-second-wave-of-tax-measures-to-help-south-africans-everything-you-need-to-know/  

April 23 2020 By Staff Writer - businesstech.co.za