The impact of COVID-19 lockdown on tax and unemployment related matters

By Piet Nel, SAICA Project Director, Tax.

Johannesburg, 30 March 2020 – The President of South Africa, Mr Cyril Ramaphosa, recently announced a 21-day lockdown period from midnight on Thursday, 26 March until midnight on Thursday, 16 April 2020 due to the COVID-19 pandemic.

The COVID-19 lockdown currently in place will have an impact on tax-related matters.  This includes contact with the South African Revenue Services (SARS), returns and payments due to SARS, as well as disputes.  It also has an impact on employers and their employees.  Whilst a lot of information was available at the time of writing of this article, it is expected that more information will be made available over the next couple of days.  The following is based on information that was available on 29 March 2020:

Contact with SARS during the period

SARS advised taxpayers and tax practitioners to use the online channels such as eFiling, the SARS MobiApp and [email protected] to interact with SARS.  SARS has provided dedicated email addresses for this purpose on their website. 

It is envisaged that visits to SARS offices are possible, but an appointment must be made on the SARS website.  Please remember the lockdown restrictions that are in place when you are travelling to a SARS branch.  Remember that accountants and tax practitioners are not seen as the providers of essential services.  Special rules relating to Customs and border posts were made available by SARS. 

Submission of returns 

There is no relief for the submission of tax returns.  Taxpayers must therefore ensure that returns are submitted on or before the due dates.   


According to a notice from the Chairperson: Customs and Excise National Appeals, the days during the period 27 March 2020 to 16 April 2020 will not be taken into account in determining days or period for purposes of an appeal under the Customs Act. 

SARS has not given a similar notice for objections and appeals under the other tax Acts.  Where a taxpayer is unable to comply with a prescribed period during which steps in the dispute process must be instituted due to the lockdown, it would constitute exceptional circumstances. 


Tax debt:

There is no relief for the payment of assessed taxes and payment must be made on the due date.  In fact, SARS said that this is a critical period for SARS in terms of revenue collections and now, more than ever, the country requires everyone to pay their fair share.  SARS requested that payments are made on time and that COVID-19 uncertainty is not used as a reason for non-payment.  SARS may well continue with their collection procedures of tax debt. 

Where a taxpayer is unable to make the payment, or can only do so partially, a request for a deferred arrangement during the lockdown period must be sent to the dedicated email addresses made available by SARS. 

Other taxes:

In line with the announcement by the President, SARS and National Treasury confirmed that effective 1 April 2020, tax compliant businesses with a turnover of less than R50 million will be allowed to delay paying a portion of their amounts due to SARS.  The details are as follows:

Employees’ tax

With respect to pay-as-you-earn (PAYE) liabilities, tax compliant business with a turnover of less than R50 million can delay 20% thereof for a limited period of four months, beginning 1 April 2020 and ending on 31 July 2020.  The deferred PAYE liability must be paid to SARS in equal instalments over the six-month period commencing on 1 August 2020, i.e. the first payment must be made on 7 September 2020.  There is no relief for the March payment due on 7 April 2020. 

Provisional tax:

Tax compliant small- to medium-sized businesses will also be allowed to defer of a portion of the payment of the first and second provisional tax liability to SARS, for a period of twelve months, beginning 1 April 2020 and ending on 31 March 2021, without SARS imposing administrative penalties and interest for the late payment of the deferred amount.  This means that the payment due 31 March 2020 must be made in full. 

The first provisional tax payment due from 1 April 2020 to 30 September 2020 will be based on 15% of the estimated total tax liability, while the second provisional tax payment from 1 April 2020 to 31 March 2021 will be based on 65% of the estimated total tax liability.  Provisional taxpayers with deferred payments will be required to pay the full tax liability when making the third provisional tax payment in order to avoid interest charges. 

The proposed amendments are deemed to have come into operation on 1 April 2020 and apply to first provisional tax periods ending on or after 1 April 2020 but before 1 October 2020 and to second provisional tax periods ending on or after 1 April 2020 but before 1 April 2021. 

Employment Tax Incentive (ETI):

For the period of four months, beginning 1 April 2020 and ending on 31 July 2020:

  • The maximum amount of ETI claimable during this four-month period for employees eligible will be increased from R1 000 to R1 500 in the first qualifying twelve months and from R500 to R1 000 in the second twelve qualifying months. 
  • Allowing a monthly ETI claim in the amount of R500 during this four-month period for employees from the ages of:
    • 18 to 29 who are no longer eligible for the ETI as the employer has claimed ETI in respect of those employees for 24 months; and
    • 30 to 65 who are not eligible for the ETI due to their age. 
  • Accelerating the payment of employment tax incentive reimbursements from twice a year to monthly as a means of getting cash into the hands of tax compliant employers as soon as possible.

This will, however, only apply to employers that were registered with SARS as at 1 March 2020. Further to the above, the current compliance requirements for employers under sections 8 and 10(4) of the ETI Act will continue to apply.   

Unemployment Insurance

The President also said that government is exploring the temporary reduction of employer and employee contributions to the Unemployment Insurance Fund and employer contributions to the Skill Development Fund.  The Unemployment Insurance Commissioner has developed a Corona Virus Tem­porary Employer-Employee Relief Scheme (COVID19TERS) to contribute to the containment of the Coronavirus and its impact.

In terms of the Temporary Employer/Employee Relief Scheme (TERS) process, the UIF may fund the distressed companies directly in relation to the TERS Allowance. The benefits paid will be capped at a 38% to 60% of the maximum of R17 712 per month and the employee will be paid in terms of the income replacement rate sliding scale as provided in the Unemployment Insurance Act.  The minimum that will be paid will be a replacement income equal to minimum wage of the sector concerned. 

Where an employer, as a direct result from the current COVID-19 pandemic, decided to close their business for a period and send employees home, this would constitute a temporary lay-off. If the employer cannot pay his employees for this period, the employer can apply for the “National Disaster Benefit” from the UIF. 

Where an employee has been quarantined for 14 days or longer, the Illness Benefit will apply.  Existing benefits for illness and unemployment will kick in if no leave is granted. 

Should a UIF contributor pass on from COVID-19, death benefits will be paid to the beneficiaries of the deceased. 

Employers should apply by reporting their closure to the email address: [email protected]

Value-Added Tax

SARS announced that, due to the measures put in place under the Disaster Management Act 57 of 2002, “essential goods” as defined in Regulation R.398 in Government Gazette No 43148 of 25 March 2020 will be subject to a VAT exemption and a full rebate of customs duties during the COVID-19 pandemic. 

The VAT-rulings department at SARS announced that work on rulings in progress will be delayed. Any correspondence, including new ruling applications submitted to SARS from 27 March 2020, will be acknowledged or responded to once the aforementioned measures have been relaxed or ended.


Employers, employees, taxpayers and tax practitioners are advised to regularly check the SARS website for updates on the issues.  SARS indicated that it would make information available to recognised professional bodies to be communicated to tax practitioners. 



The South African Institute of Chartered Accountants (SAICA), South Africa’s pre-eminent accountancy body, is widely recognised as one of the world’s leading accounting institutes. The Institute provides a wide range of support services to more than 50 000 members and associates who are chartered accountants [CAs(SA)], as well as AGAs(SA) and ATs(SA), who hold positions as CEOs, MDs, board directors, business owners, chief financial officers, auditors and leaders in every sphere of commerce and industry, and who play a significant role in the nation’s highly dynamic business sector and economic development.

SAICA Media Contact

Kulani Chauke

Communication Coordinator: Corporate

SAICA Brand Division

011 479 0698

[email protected]

For more coverage on COVID-19 visit:

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