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South Africa Proposes Extending Virus Tax-Relief Measures

South Africa Proposes Extending Virus Tax-Relief Measures

  • Treasury seeks further waiver on excise, payroll duties
  • Measures are part of stimulus package to counter Covid-19
A worker speaks with a customer at a service center in the central business district (CBD) of Johannesburg, July 28.

A worker speaks with a customer at a service center in the central business district (CBD) of Johannesburg, July 28.

Photographer: Waldo Swiegers/Bloomberg 

A worker speaks with a customer at a service center in the central business district (CBD) of Johannesburg, July 28.

Photographer: Waldo Swiegers/Bloomberg 

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South Africa’s National Treasury asked lawmakers to extend tax-relief measures for businesses, including a deferral on excise duties and payroll levies, to offset the impact of the coronavirus pandemic.

A payment holiday for excise duties on alcohol and tobacco products by tax-compliant companies should be lengthened to 150 days from 90 days, the Treasury said in a statement published on its website. The sale of tobacco products has been prohibited since a nationwide lockdown began on March 27 and the government reinstated a ban on alcohol trade from July 13.

Treasury also proposed the deferral of a 35% payroll levy for tax-compliant small and medium-sized businesses for a further month. A two-month extension on a tax exemption for virus-relief funds was also suggested.

The relief measures, initially valid for four months, formed part of the government’s 500 billion rand ($29 billion) stimulus package and were set to expire on July 31 or August 31. The proposed extensions require the approval of lawmakers on the Standing Committee on Finance.