News FlashesAugust 5, 2021CRS News Flash 2 August 2021 – SOUTH AFRICA – Emergency Tax Relief Measures

 

AUGUST 2021 – SOUTH AFRICA
EMERGENCY TAX RELIEF MEASURES
It is important that employers note the following:

Emergency tax measures as announced by President Ramaphosa
The Minister of Finance, Mr. Tito Mboweni, released a media statement to provide some detail on the measures announced by the President of the Republic on 25 July 2021 to support the recovery of the economy and provide relief to the poor in the wake of the spate of violent unrests and the ongoing Covid-19 pandemic.

The announced measures are:

·        The introduction of a tax subsidy of up to R750 per month for the next four months for private sector employers who have employees earning below R6500. This subsidy will be provided under the current Employment Tax Incentive.

·        Tax-compliant businesses with a gross income of up to R100 million will be allowed to delay 35% of their Pay As You Earn (PAYE) liabilities over the next three months, without penalties or interest.

·        Tax-compliant businesses in the alcohol sector can apply to the SARS for deferrals of up to three months for excise duty payments.

National Treasury published explanatory notes on the emergency tax measures in response to the continuing COVID-19 pandemic and recent unrest in the country.

Employment Tax Incentive (ETI) tax relief
Tax relief under the ETI is available for a four-month period from 1 August 2021 to 30 November 2021.

The first extended ETI can be claimed in your August EMP201. Please remember that this is due by 7 September 2021. The maximum monthly amount that will be permissible under the ETI during this period will be increased according to the following criteria:

·        A R750 increase to the maximum monthly amount of ETI allowable. Therefore, the maximum allowable values will be increased in the following manner:

·        Employees eligible under the current ETI Act from R1 000 to R1 750 in the first qualifying 12 months and from R500 to R1 250 in the second 12 qualifying months.

·        Allowing a monthly ETI claim in the amount of R750 during this four-month period for employees from the ages of 18 to 29 who are no longer eligible for the ETI as the employer has claimed ETI in respect of those employees for 24 months, or they were in the employer’s employ before 1 October 2013.

·        Allowing a monthly ETI claim in the amount of R750 during this four-month period for employees from the ages 30 to 65 who are not eligible for the ETI due to their age.

·        A formula will apply to calculate the value of the incentive relative to remuneration received, to introduce the incentive at a positive rate for wages between R0 and R2 000 per month, at a constant value for wages between R2 000 and R4 500 per month, and at a declining rate for wages between R4 500 and R6 500.

SARS will also pay monthly ETI refunds for the four-month period, instead of every six months as is normally the case.

PAYE tax relief period
The tax relief for PAYE is available to qualifying businesses for the three-month period from 1 August 2021 to 31 October 2021.

The first deferment can be claimed in your August 2021 EMP201 return, which is due by 7 September 2021.

PAYE deferral months:

To view National Treasury’s explanatory notes, follow the link.

 

Contact our legislation team at info@crs.co.za if you require any additional information. 

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