Date: 19 April, 2020
Author: John Henning

Provisional Tax

Entities, who are tax compliant (tax clearance certificate), with a turnover of less than R50million will be allowed to extend their provisional tax payments due for the 2020/02 for the next 6 months to “enhance” cash flow positions.

Instead of paying 50% of the expected tax bill six months into the tax year, and then settling the full amount at the end of the tax year, companies are now allowed to pay only 15% after six months, and another 50% by the end of the tax year.

Entities must keep in mind that the amount will become due at the end of the 6-month period and if not settled penalties and interest will be charged. (In short, the liability is extended to assist entities with cash shortages for the next few months, but entities are required to budget for the settlement liabilities extended.)

PAYE

Entities who are tax compliant (tax clearance certificate), with a turnover of less than R50million will be allowed to delay 20% of their monthly PAYE liabilities over the next 4 months.

After the 4 months the companies will be required to pay back this outstanding amount in equal instalments with the first payment expected on 7 September 2020. This is deemed to “enhance” cash flow over the next few months, but entities must keep in mind to “budget” for the 20% relieve received during this 4-month period as it will become due at the end of the 4-month period.

If the outstanding amount is not settled penalties and interest will be charged. (In short, the liability is extended to assist entities with cash shortages for the next few months, but entities are required to budget for the settlement liabilities extended.)