President Cyril Ramaphosa on Thursday night announced far reaching measures to help small businesses on the brink of bankruptcy due to the Covid-19 virus which has all but brought the economy to a standstill.
Ramaphosa said if the situation for small businesses worsens, government might raid reserves within the Unemployment Insurance Fund to extend support to workers in small businesses and “other vulnerable firms who are faced with loss of income and whose companies are unable to provide support.”
“Details of these will be made available within the next few days,” Ramaphosa said.
Other measures put foward by the President was a tax subsidy of up to R500 per month for the next four months for those private sector employees earning below R6,500. Government estimates that the move will help more than 4 million workers.
Ramaphosa also announced that there will be Tax relief for small businesses.
“Tax compliant businesses with a turnover of less than R50 million will be allowed to delay 20% of their pay-as-you-earn 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,” the president said.
“This intervention is expected to assist over 75 000 small and medium-term enterprises.”
The president also said the Department of Small Business Development has made over R500 million available immediately to assist small and medium enterprises that have run into financial difficulties.
The department last week announced it will soon launch a “debt relief” to save small enterprises from going under.
