According to the law firm, SMEs with a turnover of less than R50 million may defer 20 percent of their prospective pay-as-you-earn (PAYE) liabilities over the next four months, and may defer a portion of their provisional corporate income tax payments without penalties or interest over the next six months.

The deferral of provisional tax payments should apply to the first and second provisional tax payments as well as potentially the third top-up payment.

In order to qualify for these deferrals, the enterprise must be fully tax compliant. Enterprises could check their tax compliance status via SARS eFiling.

"We look forward to additional clarity around whether an application will need to be submitted to SARS or whether the relief applies automatically," the law firm said in a statement.

Government has proposed an additional tax subsidy in the amount of up to R500 per month for the next four months per qualifying employee in the private sector.

The employment tax incentive (ETI) is paid to employers who employ qualifying employees (including the youth) and is considered a labour cost-sharing mechanism between government and the private sector to incentivise employment. 

"The existing ETI is aimed at supporting qualifying employees who earn below R6 500 per month on a sliding scale based on salary where the employer is registered for employees tax.

"The employer is entitled to reduce the total amount of its PAYE liability by setting off the ETI amount calculated in respect of that month. 

"Where there is no PAYE to set off against the ETI amount, the employer will be entitled to a reimbursement of the total ETI amount available as at the end of each PAYE reconciliation period."

Any employee who falls ill pursuant to exposure to Covid-19 at work would be entitled to claim from the compensation fund. 

"Broadly speaking, claimants are required to include such compensation in their gross income for tax purposes. The amount is, however, exempt from normal tax in accordance with section 10(1)(gB) of the Income Tax Act."

African News Agency (ANA)