The Treasury and SA Revenue Service (Sars) have released for public comment draft legislation dealing with emergency tax measures that took effect from the beginning of the month and amend disaster management laws.
The emergency tax measures were part of the fiscal package outlined by President Cyril Ramaphosa at end-July in response to the continuing Covid-19 pandemic and recent unrest in KwaZulu-Natal and Gauteng that resulted in the destruction of businesses.
The second batch of the 2021 draft Taxation Laws Amendment Bill and 2021 draft Tax Administration Laws Amendment Bill amend the Disaster Management Tax Relief Act of 2020 and Disaster Management Tax Relief Administration Act of 2020.
The bills introduce a tax subsidy under the current employment tax incentive of up to R750 per month for four months for those private sector employees earning below R6,500. This subsidy will be provided under the employment tax incentive. Sars will accelerate the payment of the incentive’s reimbursements from twice a year to monthly to get cash into the hands of compliant employers as soon as possible.
The bills also provide that tax compliant businesses with a turnover of less than R100m will be allowed to delay 35% of their PAYE liabilities over three months without penalties or interest.
Tax compliant businesses in the alcohol sector can apply to Sars to obtain deferrals of up to three months for excise duty payments, after setting out the circumstances justifying a deferral. This measure does not require a legislative amendment as the customs and excise rules that Sars administers were amended in 2020 to provide for deferrals of excise in cases of temporary financial constraint.
The proposed tax amendments, as well as those included in the initial batch of the 2021 draft tax bills, published for public comment at end-July, will be combined into two final bills that will be tabled in parliament during the 2021 medium-term budget policy statement.
Written comments on the draft bills, which are available on the Treasury’s website, have to be made by close of business on August 28.
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