The Financial Implications of the President’s Lockdown Speech

a wall with many countries’ banknotes pinned to itUpon closer inspection of the official statement from the office of the President, this is my interpretation on it and not official advice.

  1. Using the tax system, we will provide a tax subsidy of up to R500 per month for the next four months for those private-sector employees earning below R6,500 under the Employment Tax Incentive. This will help over 4 million workers.

ETI – this means that SARS will allow a further R500pm for 4 months TI for people earning BELOW R6500 (per person); presumably with effect from 1.4.2020 (or maybe 1.3.2020). So we will be allowed to pay SARS R500 less per employee per month when doing your (clients) PAYE. So if we normally pay R10 000 and there are 3 staff earning below R6500 then you would pay R8500 to SARS. So they/we recover the money from SARS. We have to pay it to the staff from NOW. This will always be on the proviso (this is what I surmise) that all their tax affairs are in order, no money is outstanding and ALL (Vat, Paye, Income Tax, Provisional Tax etc) returns are in and paid for.

  1. The South African Revenue Service will also work towards accelerating the payment of employment tax incentive reimbursements from twice a year to monthly to get cash into the hands of compliant employers as soon as possible.

TI will be accelerated to get refunds monthly instead of twice a year. I assume this is for people who are in refund situations – ie their Incentives exceed their PAYE liability and therefore are due a refund – they going to process this sooner

  1. Tax compliant businesses with a turnover of less than R50 million will be allowed to delay 20% of their pay-as-you-earn liabilities over the next four months and a portion of their provisional corporate income tax payments without penalties or interest over the next six months. This intervention is expected to assist over 75 000 small and medium-term enterprises.

Self-explanatory. You can choose to pay 20% less than the total liability for PAYE and Provisional Tax and pay this later with no penalty nor interest

  1. We are exploring the temporary reduction of employer and employee contributions to the Unemployment Insurance Fund and employer contributions to the Skill Development Fund.

 A temporary reduction. I have read that you will not need to pay UIF at all and all staff won’t have UIF deducted. In addition, no payments to SDL – that will help save money

  1. The Department of Small Business Development has made over R500 million available immediately to assist small and medium enterprises that are in distress through a simplified application process.

This appears to be of direct assistance. How much each will get and when and who actually qualifies, I do not know. I encourage clients to fill this form in ASAP and get it registered. Be 100% accurate and correct otherwise, it could result in the form being rejected. See or call 0860 663 7867 for more info.

  1. The Industrial Development Corporation has put a package together with the Department of Trade, Industry and Competition of more than R3 billion for industrial funding to address the situation of vulnerable firms and to fast-track financing for companies critical to our efforts to fight the virus and its economic impact.

This is for loans for companies that fall into this category. Please visit for more information

  1. 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.

Go to the Source for the Most Accurate Information

I have looked at their website and called them (too soon). They have announced that they are still in meetings. However, to refer to their website. Anything announced and procedures will be on there: or call 0860 868 747 for more info.

We will naturally help wherever I can. If it is a simple direction or advice we will not charge. However, if we are engaged to do the work for you our hourly rate will apply multiplied by the estimated time needed to complete the task. Feel free to allow estimated fees.

Thank you and Kind regards,

Gavin Bacon