Page 44 - Q&A

Key proposed Covid-19 tax relief measures
contained in draft taxation bills

May 2020
“I’ve seen a lot of reference in the media about new tax measures that
Government wants to implement to cushion the blow of the Covid-19 pandemic.
What are these and how can they benefit me and my business?”
Commercial Most households and businesses have suffered losses in income as a result

of the Covid-19 lockdown, necessitating Government to step in and provide
measures to assist individuals and businesses to survive the pandemic
and its fallout, and have to this extent tabled tax amendment bills with
proposed measures.
Each measure has its own complexity and requirements, but one can broadly
summarise them as follows:

• Skills development levy holiday: As from 1 May 2020 there will be a four
month holiday for skills development levy contributions to assist businesses
with cash-flow.
• Fast tracking of VAT refunds: Smaller VAT vendors who are in a net refund
position will be temporarily allowed to file monthly instead of once every
two months, which will unlock the input tax refund faster and immediately
help with cash-flow.
• Three month deferral for filing and first payment of carbon tax: The filing
requirement and the first carbon tax payments were due by 31 July 2020.
However, to provide cash-flow relief the payment date has been extended
to 31 October 2020.
• Deferral for the payment of excise taxes on alcoholic beverages and
tobacco products: Due to the restrictions on the sale of alcohol and
tobacco products, payments due in May 2020 and June 2020 will be
deferred by 90 days.
• Postponing the implementation of certain Budget 2020 measures:
During the budget speech it was announced that certain measures would
be implemented to broaden the corporate income tax base by (i) restricting
net interest expense deductions to 30% of earnings; and (ii) limiting the
use of assessed losses carried forward to 80% of taxable income, which
measures were to commence on 1 January 2021. These measures have
now been postponed to 1 January 2022.
• Employment tax incentive: A wage subsidy of R750 shall be paid to all
employees who earn less than R6,500.00 per month.

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