Ministers who serve on the National Coronavirus Command Council gathered today, Tuesday April 28, to discuss socio-economic relief interventions planned to assist the COVID-19 fight and the strengthening of the performance of the economy under the current conditions.
As the country begins a gradual and phased recovery of economic activity, various departments will undertake a Risk Adjusted Approach in key sectors and priority areas.
The phased in approach will affect key economic sectors and drivers as well as promote human development and wellbeing. It had been expected that in some cases, a sector would not be able to return to full production during Level 4 or even at lower levels while the risk of infection remains.
This plan will span the next six to eight months, as the peak of COVID-19 is expected to hit in September.
Here are the key points:
Minister of Tourism, Mmamoloko Kubayi-Ngubane explained that the National Treasury has issued a second set of measures to assist businesses and individuals through difficulties brought up by COVID-19.
These measures consist of fiscal and support instruments to help our economy overcome the severe impact on production, markets, trade and employment. The interventions include:
• Skills development levy holiday.
• Fast-tracking of value-added tax (VAT) refunds.
• Three-month deferral for filing and first payment of carbon tax liabilities.
• A deferral for the payment of excise taxes on alcoholic beverages and tobacco products.
• An increase in the expanded employment tax incentive amount:
• An increase in the proportion of tax to be deferred and in the gross income threshold for automatic tax deferrals
• Increasing the deduction available for donations to the Solidarity Fund
• Adjusting pay-as-you-earn for donations made through the employer
• Expanding access to living annuity funds
• Further support for firms will come from a R200 billion loan scheme for small and medium-sized businesses.
The National Treasury is finalising the details and should be ready by the end of this week as previously indicated by the Minister of Finance last week.
As part of government’s interventions to mitigate the effects of COVID-19; the Department of Tourism opened an application portal for the COVID-19 R200 million Tourism Relief Fund. However, it has been put on hold after the Department was served with Court papers by both Afriforum and Solidarity in an attempt to set aside the scheme on grounds of its transformational characteristics as it upholds the Broad Based Black Economic Empowerment Act. Companies may still apply for the relief fund, and the Department will go forward with allocation based on the court outcomes.
“We have commenced work with global, continental and national stakeholders to develop a post-covid tourism recovery strategy. Suffice at this stage to say that the industry will be focusing on three phases: survival, recovery and then prosperity, ” said Minister Mmamoloko Kubayi-Ngubane
All employers are encouraged to apply for the temporary COVID-19 benefits through the Employer-Employee relief scheme on behalf of their employees.
“To date, the UIF has received just over 103 thousand applications from employers representing about 1,75 million employees. In total, the UIF has over 1, 8 million employers registered on its database representing more than 8-million workers. As of today, the cumulative amount paid since April 27 is R3,3 billion.”
“Of the received applications, the UIF has processed 59 thousand employers applications which means that more then 862 thousand employees will receive their benefit. About 10 thousand applications could not be processed due to errors and the affected companies have been notified to correct their applications and resubmit. Some of the errors identified relate to incorrect banking details, making it impossible for payments to be processed.”
Employers returning to business will be required to stick to a number of strict health and safety guidelines to minimise risk. The Department of Employment and Labour has COVID-19 guidelines to assist South African businesses.
“In the period since the issuing of the guidelines, a clear picture has emerged about COVID-19 and the nature of hazards and precautions in the work places. That should be taken to minimise the risks. To this end the department working with social partners at NEDLAC has developed OHS direction, the purpose of which is to stipulate measures that must be taken by employers in order to protect the health and safety of workers and the members of the public who enter the workplaces or are likely to be exposed to their activities.”
R530 million has been set aside to support SMMEs and the Department of Small Business Development under the SMME relief scheme to support payroll, rental and utilities for three months. To date the scheme has approved over R235 million, protecting over 11 thousand jobs. The Spaza shop support scheme was launched a week ago and has already received over 104 applications with 88 already approved.