Page 45 - Q&A

• Deferral of provisional tax and employees tax (PAYE): Businesses with
a gross income of up to R100 million will be able to defer provisional tax
payments and 35% of their PAYE payments. Businesses with an income of
more than R100 million can apply to SARS to have these payments deferred.
• Deductions available for donations to the Solidarity Fund: The tax
deductible limit for donations will be increased by an additional 10%
during the 2020/21 tax year.
• Adjusting PAYE for donations made through the employer: The senior
employees of many businesses have announced that they will donate a
third of their salaries to the Solidarity Fund. This however resulted in cash-
flow difficulties from a PAYE perspective. In terms of legislation an employer Commercial
may reduce the employee’s remuneration for PAYE withholding purposes
by the amount of donations made (capped at 5%). This has now been
amended to 33,3% for donations made to the Solidarity Fund.
• Expanding access to living annuity funds: Individuals who receive
income from a living annuity will temporarily be allowed to immediately
either increase (up to 20%) or decrease (to a minimum of 0.5%) the
proportion they receive has annuity income, instead of having to wait until
the next anniversary date of the contract.

These measures will be given effect in terms of two amendments bills, namely
the Draft Disaster Management Tax Relief Bill and the Draft Disaster Management
Tax Relief Administration Bill.

Our advice would be to contact your auditor or financial advisor to discuss how
these amendments could potentially benefit you and your business.

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