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Deferred PAYE payments result in R750mn in debt relief so far

Treasury moved speedily after the hard lockdown was announced at the end of March to offer companies tax relief in various ways for a four-month period.

Sars online tax return revenue service 123rfbusiness 123rfpersonalfinance

CAPE TOWN - National Treasury says that more than 9,000 firms took advantage of being able to defer pay as you earn (PAYE) payments in April, with the number dropping slightly to 7,000 in May.

Parliament’s been told this resulted in total relief for the two months of around R750 million.

Treasury and SA Revenue Service officials on Tuesday briefed Parliament’s finance committees on the Disaster Management Relief Tax and Tax Administration bills which were tabled by Finance Minister Tito Mboweni during his emergency budget last month.

Treasury moved speedily after the hard lockdown was announced at the end of March to offer companies tax relief in various ways for a four-month period.

Treasury’s Chris Axelson said it was too early to quantify the extent to which firms were making use of the tax relief measures introduced, but he expected it to increase over the course of July and August.

He provided figures as at June 25.

“The total relief was about R750 million. The Skills Development Levy so far has provided relief of about R1.6 billion in terms of exemptions in that regard.

“There have been some large excise duty and fuel levy deferrals, up to the value of R7.5 billion, which provides cash flow relief to those firms, but will ultimately be paid back.”

Axelson said SARS was also dealing with applications on a case-by-case basis.

“SARS said there are about 255 applications on the case-by-case basis, 167 of these have been approved to the value of about R1 billion. Four hundred and thirty-four SMMEs took advantage of faster VAT returns so they could get their refunds upfront and a bit quicker.”

There are about 180,000 companies registered to pay corporate income tax in South Africa.