In their efforts to relieve and support small to medium enterprises during this particularly tough economic climate, the South African Revenue Services (SARS) has implemented four basic tax relief measures.
SMEs have no doubt felt the purse strings tighten and looked for ways to save money. While these tax relief measures are temporary, SARS is able to make these measures available to compliant businesses, due to the improvement in revenue collection in recent years. “The first quarter of the current financial year had exceeded expectations and had outperformed revenue collections for the same period over the past three years”, said SARS commissioner Edward Kieswetter.
The tax relief measures are as follows:
Employment Tax Incentive
Under the current Employment Tax Incentive, age eligibility and claimed amount has been expanded. From August to 30 November 2021 tax subsidies will be calculated as below:
- An amount of R1750 (up from R1000) will be given to employers in the first 12 months, whose employees were already eligible. Employers will be given R1250 (up from R500) in the second 12 months.
- Up to R750 per month will be given to private sector employers who have employees aged 18 – 29 and earning less than R6500. These employees were originally ineligible.
- Up to R750 per month will be given to private sector employers who have employees aged 30 – 65 and were not previously eligible due to age.
To qualify for this benefit, employers must be both tax compliant and registered with SARS. ETI refunds will be paid out monthly until 30 November.
Pay As You Earn (PAYE) tax relief
The deferral of the payment of 35% of employees’ tax liabilities (PAYE) has been extended for SMEs from 1 August to 31 October 2021. The first deferment period was due on 7 September 2021, the second is due in October 2021 and the third and final one in November 2021.
To claim for this benefit you just need to complete your EMP201 as normal. The benefit is only available to small or medium sized businesses that are a company, partnership, individual or trust with a gross income that does not exceed R100 million for the year of assessment ending on or after 1 April 2021.
Alcohol industry excise duty payment relief
After all the restrictions placed on the national sale of alcohol, compliant businesses in the alcohol industry can apply to SARS for a deferral of their excise duty payment, for up to three months. This benefit will be assessed on an individual business level and is currently available.
A comprehensive breakdown of these measures is available on the National Treasury website.