By Ruan van Jaarsveld ACMA, CGMA
In Government’s continued efforts to support business owners through the financial strain brought on by the COVID pandemic and more recently exacerbated by unrest throughout SA, President Cyril Ramaphosa announced the introduction of 2021 Emergency Tax Relief applicable to tax-compliant SMMEs and other qualifying companies.
The announced relief measures are:
Employment Tax Incentive (ETI)
A tax subsidy (under the Employment Tax Incentive) of up to R750 will be available for the next four months (1 August 2021 to 30 November 2021) for private sector employees earning below R6 500 per month. The first ETI can be claimed in your August EMP201 which is due by 7 September 2021. Refunds which will commence on 13 September will be paid monthly for the four-month period (instead of every 6 months which is usually the case). The ETI tax relief is subject to verification and eligibility as set out by SARS.
PAYE Tax Relief
Tax compliant businesses with a gross income not exceeding R100 million per annum will be permitted to delay 35% of their PAYE liabilities over the next three months, without penalties or interest. The relief is available from 1 August 2021 to 31 October 2021 and can be claimed in your August EMP201 return (due 7 September).
Payment of the deferred amounts will be calculated and the total will be due to SARS over a four-month period commencing 7 December 2021, with the final payment due by 7 March 2022.
Alcohol Industry Excise Duty Payment Deferral
Businesses in the alcohol sector can apply to SARS for deferrals of up to three months for excise duty payments. Businesses affected in this sector must apply to SARS for the deferral relief, and consideration will be based on merit and in accordance with relevant legislation.
With the introduction of the various incentives and the many avenues available to businesses, tax – planning and tax compliance has never been more complex. Although these measures can support a business immensely and carry it through a challenging period, selecting the relief can also mean delaying and compounding an already strained financial situation. What is good for one business may necessarily affect another adversely.
Our team at Hobbs Sinclair are fully up to speed on SARS’s initiatives, relief measures and how the rules apply We strongly suggest that our clients have an honest chat with us about their status and options and together with us formulate an effective tax plan.