A revised 2020 Draft Disaster Management Tax Relief Bill and 2020 Draft Disaster Management Tax Relief Administration Bill have been published for comment.
In a statement, national treasury pointed out that the draft bills give effect to the media statement issued on 24 April 2020 regarding further tax measures to combat the COVID-19 pandemic, following the address by President Cyril Ramaphosa on 21 April 2020.
“The revised 2020 Draft Disaster Management Tax Relief Bill and the 2020 Draft Disaster Management Tax Relief Administration Bill provide the necessary legislative amendments required to implement the further tax measures aimed at combating the COVID-19 pandemic and also take into account public comments received on the initial batch of COVID-19 draft tax bills published on 1 April 2020.”
Previously, treasury reported that the measures are over and above the tax proposals outlined in the 2020 Budget in February.
The tax adjustments are made due to the national state of disaster and the potential negative impacts of COVID-19 on the economy.
Draft Customs and Excise Act Rules were also published for comment.
The amendments focus on special provisions in respect of payment of excise duty on certain goods during the period commencing 1 May 2020 and ending 30 June 2020, instalment payment agreements, qualifying criteria for payment of debt in instalments and applications for instalment payment agreements.
Comment is invited until 15 May 2020.
Meanwhile, treasury recently confirmed that the COVID-19 pandemic is simultaneously a health crisis and a far-reaching global economic crisis.
Treasury declared this in a briefing on the financial implications of COVID-19 on both the economy and budget during a virtual meeting in parliament.
Treasury acknowledged the role played by government in acting decisively to prioritise the health and lives of all South Africans but highlighted that the local economy, already weak before the emergence of the novel coronavirus, has been hit hard by interlocking shocks to supply and demand.
According to treasury, the “immediate priority is to support economic activity and alleviate hardship”.
A risk-adjusted approach to reopening the economy has been adopted with the initial easing of lockdown measures on 1 May.
Treasury confirmed that the R500 billion support package will provide substantial support to the economy but will increase the budget deficit and contingent liabilities.
A special adjustments budget, setting out a range of economic reform proposals and measures to stabilize the public finances, will be tabled in the next few months.
However, over the longer term, government cannot merely return the economy to where it was before the pandemic.
Forging a new economy in a new global reality will require a social compact between business, labour, communities and government; far-reaching structural reforms enabling millions of South Africans to participate in building a more productive and prosperous society and steps to promote industrialisation, and the overhaul of state-owned enterprises.
In terms of the domestic economy, treasury estimates that approximately one-third of the resources that were productive in February 2020 have been idled, largely as a result of the domestic lockdown.
“Real-time economic data, such as average daily transaction values through the payment system have more than halved as economic activity has declined.”
Treasury also pointed out that, the longer economic growth remains weak, the “greater the risk that there will be permanent destruction of supply-side capacity with profoundly negative implications for household incomes and welfare”.
Government is committed to implementing structural reforms to move South Africa onto a higher growth path.
Specific measures to achieve this, and details on the fiscal position, will be set out in the forthcoming adjustments budget.
In a separate matter, treasury has also published a technical paper on financing a sustainable economy.
The paper aims to define sustainable finance for all parts of the South African financial sector including banking, retirement funds, insurance, asset management and capital markets; take stock of the global and national financial sector policy, regulatory and industry actions taken to date in dealing with environmental and social (E&S) risks and opportunities; identify market barriers to sustainable finance and the implementation of E&S risk management best practices and identify gaps in the existing regulatory framework and recommend actions required of regulators, financial institutions and industry associations.