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Government reviewing two sets of draft bills introduced as COVID-19 tax measures

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Government says is currently reviewing two sets of draft bills that were introduced as COVID-19 tax relief measures during the lockdown period.

They are the Disaster Management Tax Relief Bill and the Disaster Management Tax Relief Administration Bill (COVID-19 tax measures).

The Bills were published on the 1st of April for public comments.

They are in line with the tax proposals announced by the Finance Minister, Tito Mboweni in March in response to the pandemic.

Briefing Parliament’s Portfolio Committee on Finance, the National Treasury says because the bills are still at a primary stage of drafting, reviewing them is vital given the on-going amendments of COVID-19 regulations.

Treasury’s Chief Director, at the legal unit, Yanga Maputa says the review of the bills is informed by President Cyril Ramaphosa’s extension of the lockdown.

The bills form part of measures to cushion small businesses and keep them afloat due to lock down regulations.

They are additional proposals to COVID-19 tax relief measures.

In this video, Teboho Maruping explain the UIF process:

Chief Director in the legal unit of the Treasury, Yanga Maputa explains, “All the amendments that are in these bills are over and above the amendments that were in the Budget. So, the bills do not include any of the proposals that were in Budget in 2020. The bills only have those proposals that were announced by the president and also by the minister of finance on 29 March.”

However, Maputa says the exclude refund on tax and VAT exemption on imported critical supplies such as personal protective equipment.

“Some of the proposed tax measures in the bills include an expansion of employment tax incentive in order to minimise job losses during this time. Treasury is proposing an expansion of an ETI programme for to four months, until the end of July. Deputy Director General Ismail Momoniat says if these tax incentives are not provided many businesses will not be able to survive.”

In addition, another COVID-19 tax incentive is that eligible employees will be allowed to make a monthly claim to the amount of R500 over a period of four months.

But Treasury’s Chief Director for Economic tax analysis Christopher Axelso says only employers that were registered with the South African Revenue Service from the 1st of March 2020 qualify.

“They can immediately deduct. They don’t need to apply, and there is no registration. As long as they file pay as you earn with SARS-they can get this. The point was to try to get cash in the hands of the affected businesses as quickly as possible. And also to try to be incentives to keep those employees in their books. If they were to lay off these employees they would not be able to claim these monies. So, this is really to try to keep that employee and employer relationship and to give them incentives to do so.”

In the video below, a discussion on the potential impact COVID-19 will have on SA economy:

R500 billion COVID-19 Economic Plan:

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