SA Treasury introduces tax subsidies among measures to mitigate impact of Covid-19

JOHANNESBURG – South Africa’s Treasury announced a tax subsidy for some employers, among measures to mitigate the impact of the Covid-19 pandemic on the economy.

In a statement on Sunday, the Treasury said the measures, effective from April 1, were over and above the tax proposals made in the 2020 budget review last month, and were made in light of the national state of disaster declared by President Cyril Ramaphosa “and due to the significant and potentially lasting negative impacts on the economy from the spreading of the COVID-19 virus”

“There is a critical need for government interventions to assist with job retention and assist businesses that may be experiencing significant distress,” the department said.

The Treasury is introducing a tax subsidy to employers of up to R500 per month for the next four months for those private sector employees earning below R6,500. It said this would help over four million workers.

In addition, the South African Revenue Service will accelerate the payment of employment tax incentive reimbursements from twice a year to monthly to get cash into the hands of compliant employers as soon as possible.