Covid-19 crisis: Treasury unpacks new tax relief measures

National Treasury has issued an explanatory note on the additional Covid-19 tax relief measures announced last week by President Cyril Ramaphosa. As Legalbrief Today has already reported, they are to be included in revised drafts of the 2020 Disaster Management Tax Relief Bill and Disaster Management Tax Relief Administration Bill, which are expected to be released on 30 April for comment. Among other things, the explanatory note compares the measures originally proposed with those now envisaged, providing some insight into the thinking behind each change, reports Pam Saxby for Legalbrief Policy Watch. 

Against that backdrop, several relief measures featured in the first draft Bills will be expanded: the employment tax incentive from R500 to R750 per month (for a four-month period, commencing 1 April); the proportion of PAYE that may be deferred, without incurring penalties or interest, from 20% to 30% (for a four-month period, commencing 1 April); the gross income limit in terms of which provisional tax payments may be deferred, from R50m to R100m (for specific tax periods); a four-month ‘holiday’ for skills development levy contributions (from 1 May to 31 August 2020); and access to living annuity funds (among other things by increasing the de-minimis threshold to R125 000 (for an indefinite period). More details are also provided on the tax implications of contributing to the Covid-19 Solidarity Fund.