Businesses are using tax-relief measures put in place by the Treasury to help them with cash-flow problems arising from the Covid-19 lockdown, the Treasury says.A number of economists grouped in the Economists Initiative suggested in a presentation to parliament’s two finance committees earlier last week that there had been little take-up of the relief.
The total tax-relief measures introduced to help financially distressed businesses and individuals cope with the lockdown are estimated to amount to R70bn, with a direct cost to the fiscus of about R26bn. Exemption from payment of the skills development levy, which amounts to 1% of the salary bill, provided relief of R1,6bn. In terms of the relief measures a skills development levy holiday of four months from May 1 was provided to assist businesses with their cash flow. The relief is expected to cost the fiscus a total of about R6bn.
The Treasury’s written presentation to the committees noted that there were 255 applications on a “case-by-case” basis for relief and of these 167 had been approved to the value of R1bn.