Emergency tax measures announced by Treasury in response to the continuing COVID-19 pandemic and recent unrest in the country.

President Cyril Ramaphosa has announced several emergency tax relief measures in response to the continuing Covid-19 pandemic and recent unrest that are aimed at helping affected (and tax compliant) businesses to recover and ensure livelihoods for employees.
In terms of a media release issued by SARS, it will “will implement these tax relief measures because compliant taxpayers have paid their fair share of tax making it possible for government to provide such a temporary safety net in a time of extreme difficulty.”
The measures which SARS will implement are:

• the extension of the expanded Employment Tax Incentive age eligibility and the amount that can be claimed, which is aimed at supporting employment in the most vulnerable sections of the labour market. This will apply for a period of four months and will come into operation on 1 August 2021 and end on 30 November 2021. SARS has clarified that in terms of the latter a tax subsidy of up to R750 per month is introduced for the next four months for private sector employers who have employees earning below R6500. SARS also clarified that the subsidy will be provided under the current Employment Tax Incentive.
• Extension of the deferral of the payment of employees’ tax liabilities (commonly referred to as PAYE) for tax compliant small to medium sized businesses. This will come into operation on 1 August 2021 and end on 31 October 2021. Tax compliant businesses with a gross income of up to R100 million will be allowed to delay 35% of their PAYE liabilities over the next three months, without penalties or interest.
• Tax compliant businesses in the alcohol sector can apply to the SARS for deferrals of up to three months for excise duty payments.

A number of draft Bills have been published by National Treasury and SARS on 29 July 2021, providing for the measures referred to above. In addition to the bills, Treasury has also published explanatory notes on the emergency tax measures.
SARS have also issued a leaflet in respect of the above and have clarified that in order to qualify for the emergency tax measures, you must be tax compliant, which means that you:

• Are registered for all required taxes
• Have no outstanding returns for any taxes you are registered for
• Have no outstanding debt for any taxes you are registered for, excluding:

1. Instalment payment arrangements
2. Compromise of tax debt
3. Payment of tax suspended pending objection or appeal.

The media release issued by SARS, as referred to, is available here.

The explanatory notes on the emergency tax measures is available here, whilst the draft bills referred to are available here.

06/08/2021