Recently businesses in South Africa have experienced numerous hardships and challenges to profitability and for some, their continued existence. As a beacon of hope and in an effort to give support and relief to those affected, National Treasury and SARS recently announced an intended R5 billion tax relief package. To relieve the economic strain being applied to businesses in South Africa currently, it was to be rolled out as soon as possible.
In today’s blog post we will look at the rapidly implemented tax relief campaign which has seemingly come to fruition over a number of days and is aimed at urgently assisting businesses during these tough economic times.
Tax Relief Measures and Effective Date
The statement issued by National Treasury briefly mentioned the intended tax relief packages, which was said to include:
- An expansion of the Employment Tax Incentive (ETI) for a period of four months; and
- A PAYE deferral for qualifying industries for a period of three months.
SARS announced in a media statement dated 28 July 2021, that the effective date of both the ETI relief and the PAYE deferral will be 1 August 2021.
- This will affect calculations in respect of the EMP201 declaration and payment which is due by 7 September 2021.
The process was implemented quite swiftly as a way to assist the parties which were disadvantaged by the recent Level 4 Lockdown as well as the bouts of unrest targeting businesses in some areas.
Please note that the changes have not been confirmed via actual government Bill or Amendment, at the time of writing and the information is still provisional at this stage. It is important to wait until the anticipated framework legislation on this is published, which government has said would be by mid-August 2021, as discussed below.
What are the requirements?
The PAYE deferral will be available to industries deemed affected by SARS and this process will be dealt with directly by them. The exact list of affected industries has not been released at the time of writing this post, but we will provide an update on this as soon as more information is made available.
Any issues or queries you have around the deferral and qualifying industries should be directed to the SARS call centre on 0800 00 7277.
Based on the information at hand it seems that the expanded ETI relief requirements will be very much the same as, if not identical to, the ETI relief measures which were introduced in April 2020.
This will most likely mean that there will be a R750 increase to the maximum monthly amount of ETI allowable for eligible employees. In addition to this, a further ETI will be available for employees who’ve exhausted their 24 month eligibility period, as well as those who previously did not qualify due to age or employment date. SARS has outlined how some of these changes may look in their media statement, here.
If you are an employer who is intending to claim ETI, it could be wise to hold off on finalising payslips for the month of August 2021 to as late as possible in the month, until this confirmation is received.
We can’t begin work on these changes until the official publication of the frameworks and as soon as this is released, we’ll begin work to immediately update our system to ensure that the expanded ETI is incorporated into the August EMP201s, well before the submission deadline of 7 September 2021.
When will changes be confirmed?
It is widely expected that the required framework to outline and confirm the details of the relief will be issued sometime mid-August 2021.
We will notify all active SimplePay clients via system notification and will release blog posts on all further developments, as soon as we receive word.
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Keep well and stay safe.