COVID-19 Tax measures

The Corona Virus is having an impact on all of us and businesses are not immune to this impact.

With everyone worried about not having socials and not be able to do normally daily activities, there is a serious worry by many business owners on how this will impact their business and eventually financial survival.

To soften the blow, the governement introduced the following tax reliefs.

  • Expansion of Employment Tax Incentive (ETI) Programme
    ETI was introduce in January 2014 to promote employment, particularly young workers(age 18-29).
    With Covid-19 there is going to be disruption of work due to illness or self-isolation.
    Therefore between 1 April 2020 and 31 July employers will be able to claim up to R 500 for workers who earn less than R 6500 per month
  • Deferral of the payment of PAYE
    To help companies with cashflow during this trying time, they can defer 20% of their PAYE from 1 April 2020 to 31 July 2020.
    The deferred PAYE liability must be paid to SARS in equal installments over the six month period commencing on 1 August 2020.
    This is for companies with a turnover under R 50 million and all their affairs with SARS is in order
  • Deferral of Provisional Tax
    The first Provisonal Tax payment due from 1 April 2020 to 30 September 2020 will be based on 15 percent of the estimated total Tax Liability.
    The second Provisonal Tax payment due from 1 April 2020 to 31 March 2021 will be based on 65 percent of the estimated total Tax Liability.
    Full tax liability will need to be covered during the third provisional tax payment.

We have discussions with clients and the majority feel that they can survive this 21 day lockdown but if it is to be extended, most small businesses will be in serious financial trouble.

It is during times like these that it is important to support your local businesses in your community and reach out where it is possible.

Please let us know if you have any questions or if you want to share your personal lockdown story.

PJ Botha CA(SA), CFP ®

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