Government recognises that the far-reaching lockdown measures to contain the spread of the coronavirus are having a significant impact on our economy.
Most households and businesses have suffered a significant loss in their income, as they comply with the regulations giving effect to the National State of Disaster declared on 15 March 2020. Government is committed to helping households and businesses stay afloat during this difficult period, whilst it continues to limit the rate of infection, on a risk-based approach.
The Minister of Finance announced the details of an initial set of measures on 29 March 2020 to assist tax compliant businesses with cash flow assistance and provide an incentive for businesses to retain their lower-income employees. Since the announcement, economic conditions have worsened, and National Treasury and SARS have received a large number of requests for assistance, including requests from large businesses that are also experiencing substantial cash flow difficulty.
National Treasury recognises that the short-term interventions announced in the first fiscal package do not go far enough in assisting businesses or
households through the crisis – especially as the lockdown has since been extended.
In line with the President’s address to the nation on 21 April 2020, the Minister of Finance provides more detail on the second set of measures that aim to assist individuals and businesses through the pandemic. There is a critical need for government interventions to assist with job retention and support businesses that may be experiencing significant distress.
The following set of measures will help businesses focus on staying afloat and paying their employees and suppliers. Assisting businesses now will ensure that our economy is in a better position to recover once the health crisis starts to subside. If businesses survive this testing time, the economy will be better placed to strive collectively towards economic growth that is inclusive (providing more opportunities for employment) and revenue generating (so that we are able to work towards improving the state of our fiscus). The measures are expected to provide around R70 billion in support, either through reductions in taxes otherwise payable or through deferrals of tax payments for tax compliant businesses.
To view the interventions please click here to read the full media release issued by National Treasury.