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1. Banking sector
The Department of Trade, Industry and Competition has passed regulations in the banking sector providing various exemptions. These will permit banks to work together to the benefit of small businesses, consumers and firms in distress. Currently, banks are offering a variety of debt-payment delays and other options to the benefit of both individuals and corporations. You are required to contact your relevant bank for further details.
2. Compensation Fund
Employees who fall ill through exposure at the workplace (both at home and the ordinary workplace) will be compensated through the Compensation Fund.
3. Department of Small Business Development
This department has made R500 million available to distressed SMEs. Registration is now open for small and medium-sized businesses that require help during the coronavirus crisis. Registration takes place at https://smmesa.gov.za.
4. Employment tax incentives – tax subsidy (‘ETI’)
A new tax subsidy of up to R500 per month for the next four months for employees earning below R6 500 per month has been introduced. SARS has undertaken to accelerate the ETI reimbursement from twice per year to monthly.
5. Industrial Development Corporation (‘IDC’)
The IDC, together with the Department of Trade, Industry and Competition, has committed R3 billion to a range of funding products in support of businesses to address vulnerable firms and for companies critical in the fight against the coronavirus and its economic impact.
6. Informal sector support
A safety net is being developed to support persons in the informal sector and we eagerly await announcements in this regard.
7. National Disaster Benefit Fund (‘NDBF’)
R30 billion has been allocated to this fund, which is obliged to pay Unemployment Insurance Fund (‘UIF’) benefits for up to three months to qualifying employees whose income has been impacted by the coronavirus pandemic. This fund has thus been created to address the coronavirus-related job losses, support job retention, facilitate illness pay-outs and reduce claim times. We await the announcement of further details in this regard.
8. PAYE and provisional corporate income tax
Tax compliant businesses with a turnover of less than R50 million will be allowed to delay 20% of their PAYE liabilities over the next four months and a portion of their provisional income tax payments, without penalties or interest, over the next six months.
9. Solidarity Response Fund (‘SRF’)
This fund was set up in response to President Ramaphosa’s call on individuals and businesses to contribute financially to measures that will deal with combatting the negative effect of the coronavirus crisis. Johann Rupert and Nicky Oppenheimer have both donated R1 billion each into this fund. It has also been announced that Patrice Motsepe as well as Mary Oppenheimer have also each pledged R1 billion in support.
10. South African Future Trust (‘SAFT’)
The Oppenheimer family has established this trust to distribute the family’s R1 billion donation with the sole purpose of extending financial benefits to employees of small, medium sized and macro enterprises (‘SMMEs’). This is to be executed by way of interest-free loans to employees of participating SMMEs over a five-year term, allowing businesses to recover from short term cash flow constraints. Such businesses are required to apply to banks for loans and these will be used to pay eligible employees’ remuneration. The employees themselves will carry no liability and will not have to pay the money back. The banking partners are Standard Bank, First National Bank, Absa and Nedbank.
11. South African Social Security Agency (‘SASSA’)
This organisation has undertaken to pay the grants for pensioners and people with disabilities earlier than usual.
12. Temporary employee/employer relief scheme (‘TERS’)
The Department of Labour has recently announced that employers who have to close their operations and are unable to pay their employees can apply for this benefit by contacting the Department on covid19ters@labour.gov.za.
13. Tourism relief funding
The Department of Tourism has made an additional R200 million available to assist SMEs in the tourism and hospitality sector who are under particular stress due to the new travel restrictions associated with the lockdown.
14. Unemployment Insurance Fund (‘UIF’) claims
Where a contributor (an employee contributing to the UIF) has been self-quarantined for 14 days or, in special circumstances, for more than 14 days, the employee will be covered under Part C of the Unemployment Insurance Act, as amended, and thus qualify for such illness benefits. In addition, where employees are required to work short time (reduced working hours), and obviously if they qualify as contributors, they are entitled to now claim from the UIF.
15. VAT exemption for essential goods on importation
This applies only to certain imported goods. As a result of the measures in place in terms of the Disaster Management Act 57 of 2002, ‘essential goods’, as defined in regulation R398 of Government Gazette No 43148 of 25 March 2020 (per paragraph A of Annexure B), will be subject to a VAT exemption and a further full rebate of customs duties on importation during the lockdown (in terms of Item 412.11/00.00/01.00 of Schedule 1 to the Value Added Tax Act 89 of 1991 and rebate item 412.11 of Schedule 4 of the Customs and Excise Act 91 of 1964).
16. VAT timeframe for the export of goods by vendors and qualifying persons affected by the coronavirus
The Binding General Ruling has been issued to address the Export Regulations and Interpretation Note 30 (‘IN30’) which, in essence, prescribes the time periods to export movable goods, apply for a refund from the VAT Refund Administrator and to obtain the relevant documentary proof of export. The Export Regulations and IN30 allow for an extension of the aforementioned time periods, whereby these periods cannot be met because of circumstances beyond the control of the qualifying purchaser or the vendor. In view of the current lockdown and the measures put in place to deal with it,qualifying purchasers and vendors will have difficulty in meeting the abovementioned prescribed time periods as contained in the Export Regulations and IN30.
