SUMMARY OF THE CURRENT INTERVENTIONS
The President announced a number of interventions:
- National Disaster Benefit Fund: R 30 Billion has been allocated to a special National Disaster Benefit Fund, which will pay Unemployment Insurance Fund benefits for up to three months to qualifying workers whose income has been impacted by the coronavirus pandemic. This fund will address the coronavirus related job losses, support job retention, illness payouts and reduced time claims.
- Informal sector support: A safety net is being developed to support persons in the informal sector.
- SASSA: The South African Social Security Agency (Sassa) grants for pensioners and people with disabilities to be paid early.
- Temporary Employee Relief Scheme: A special dispensation for companies that are in distress, through this employees will receive wage payment through the Temporary Employee Relief Scheme, which will enable companies to pay employees directly during this period and avoid retrenchment.
- Banking sector: The Department of Trade and Industry has passed new regulations in the banking sector. The exemptions will allow banks to work together which will help small businesses, consumers and firms in distress.
- Tax subsidy: A new tax subsidy of up to R 500 per month for the next four months for employees earning below R 6 500 per month.
- Employment tax incentive: SARS to accelerate employment tax incentive reimbursement from twice per year to monthly.
- PAYE & Provisional corporate income tax: Tax compliant businesses with a turnover of less than R50 million will be allowed to delay 20% of their PAYE liabilities over the next four months and a portion of their provisional corporate income tax payments without penalties or interest over the next six months.
- Compensation Fund: Employees who fall ill through exposure at their workplace will be paid through the Compensation Fund.
- SMME debt relief fund: The Department of Small Business Development made R 500 million available to distressed SMEs. Registration is now open for small and medium-sized businesses that require help during the coronavirus crisis.
- IDC: The Industrial Development Corporation, together with the Department of Trade, Industry and Competition has committed R 3 Billion to a range of funding products in support of business to address vulnerable firms and for companies critical to fight the virus and its economic impact.
- Tourism Relief Funding: The Department of Tourism has made an additional R200 million available to assist SMEs in the tourism and hospitality sector who are under particular stress due to the new travel restrictions.
- Solidarity Response Fund: This was setup to help deal with the fallout of the coronavirus, and measures to slow its spread. Individuals and businesses can contribute to this fund. Johann Rupert and Nicky Oppenheimer have donated R 1 billion each into this newly established Solidarity Fund.
- Possible temporary reductions: Possible temporary reductions of employer and employee contributions to the Unemployment Insurance Fund and possible temporary reduction of employer contributions to the Skill Development Fund.
More specific details on each of the above-mentioned interventions will be released within the next few days and we will keep you informed.
SMME DEBT RELIEF FUND (Item 10 on the above list)
Requirements for Application to the fund
Businesses wanting to apply for funding need to meet the following criteria:
- The business must be 100% owned by South African citizens
- The business should employ at least 70% South African nationals
- The business must be registered with SARS for tax purposes
- The business must be fully tax compliant in all aspects with SARS (E.g. all returns submitted, all debt has been paid to date and all outstanding information has been submitted)
- Business owners must demonstrate a direct link, or how they will be potentially affected, by the pandemic in their operations
The fund will offer eligible businesses with working capital, stock, bridging finance, order finance and/or equipment finance. The allocation of these supporting services will be at the discretion of the managers of the fund.
Applications for the fund has opened on the 24th of March 2020.
Below is the link to the online application platform:
The following are some of the detail’s companies will be required to complete:
- Annual turnover
- Shareholding (including current BEE standing)
- Number of employees
- Employee demographics
- Whether financial or non-financial assistance is required
Kindly contact us if you would like to apply and you meet all the requirements to submit an application to the Debt Relief Fund. We will then supply you with a form and a list of information we require in order to submit the application on your behalf. We will provide proof of the application that has been submitted.