Emergency tax relief measures for employers announced

A recent media statement from the Minister of Finance confirmed and provided detail regarding measures implemented to support the recovery of the economy and to provide some relief to poor households during the COVID-19 pandemic and the recent incidents of unrest in various parts of South Africa.

In a nutshell, the measures are:

1 – A tax subsidy of up to R 750 per month for the next 4 months for private sector employers who have employees earning less than R 6 500 per month. This subsidy will be facilitated through the existing Employment Tax Incentive Scheme. Some notes:

  • The relief under this incentive is available from 1 Aug 2021 to 30 November 2021 (i.e. 4 months).
  • The first claim can be claimed on the August 2021 EMP201.
  • The maximum monthly amount can be increased based on the following:
    • R 750 is the maximum allowable increase;
    • Employees who are eligible under the current ETI rules are increased from R 1 000 to R 1 750 for the first 12 months, and from R 500 to R 1 250 for the second 12 months;
    • Employees who fall outside of the age band (i.e. 18 to 29) during the next four months because the employer has already claimed for the 24 months, or the employee joined the company before 1 Oct 2013, thus ordinarily disqualifying them, will now be eligible for the R 750;
    • Employees who are not ordinarily eligible because they are in the age group 30 to 65, will now be eligible for this 4 month period.
  • Where an ETI refund is due, SARS will pay this refund monthly for the upcoming 4 month period – i.e. not every six months, as is the current payment cycle.

2 – Tax compliant businesses whose gross annual income does not exceed R 100 000 can delay the payment of 35% of their PAYE liability over the next 3 months. No penalties and interest will be levied on this delayed payment. There naturally will be a stipulation on how this must be paid off after the 3 month period.

The first deferment can be claimed on the August 2021 EMP201. (i.e. due on the 7th of September)  

3 – Tax compliant businesses in the alcohol sector can apply to SARS for a deferral of up to 3 months on their excise duty payments.   

More information available here.