COVID-19 SAIPA Updates

Tax benefits (in relation to COVID-19)

25 March 2020

Tax benefits (in relation to COVID-19)
On 23 March, President Cyril Ramaphosa announced the following tax relief measures, which will apply to certain employers during the next few months, were announced:

  • Government will provide a tax subsidy of up to R500 per month for the next four months for those private sector employees earning below R6 500 under the Employment Tax Incentive. The Employment Tax Incentives Act, 2013 encourages the employment of young workers and provides relief to qualifying employers by means of a reduction of monthly employees’ tax.
  • The South African Revenue Service (SARS) will work towards accelerating the payment of employment tax incentive reimbursements from twice a year to monthly in order to get cash into the hands of compliant employers as soon as possible.
  • Tax compliant businesses with a turnover of less than R50 million will be allowed to delay 20% of their employees’ tax 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.

Please note that this is only a delay of the relevant employees’ tax and provisional tax obligations and not a reduction.

  • Government is also exploring the temporary reduction of employer and employee contributions to the Unemployment Insurance Fund (UIF) and employer contributions to the Skills Development Fund.

We are awaiting regulations from National Treasury that will provide more information on these developments.