South Africa: Emergency Tax Relief Measures Introduced

South Africa: Emergency Tax Relief Measures Introduced

The South African Revenue Service (SARS) has implemented various emergency tax relief measures in response to the on-going Covid-19 pandemic and the recent unrest within the country. The measures have been put in place to help affected and tax-compliant businesses to recover and protect the livelihoods of their employees.

SARS has implemented the relief measures as compliant taxpayers have paid their fair share of tax, making it possible for the government to provide a temporary safety net in a time of extreme difficulty. Edward Kieswetter, SARS Commissioner, stated: “The first quarter of the current financial year had exceeded expectations and had outperformed revenue collections for the same period over the past three years.”

The measures include:

  • 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 came into operation on 1 August 2021 and will end on 30 November 2021.
  • 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 came into operation on 1 August 2021 and will end on 31 October 2021.
  • Tax compliant businesses with a gross income of up to R100 million are allowed to delay 35% of their Pay –As- You Earn (PAYE) liabilities over the next three months, without penalties or interest.
  • Deferral of excise duties on alcoholic beverages of up to three months by tax compliant licensees in the alcohol sector, on application setting out the circumstances justifying a deferral.

For more information on coronavirus support measures for employers and employees, visit the activpayroll latest news page.

If you are interested in doing business in South Africa, find out everything you need to know about payroll, tax, social security, employee benefits, work permits, employment law and more in the activpayroll Guide to Doing Business in South Africa. This is available as a free PDF to download.