Open letter to the Minister of Finance

DEAR Minister Tito Mboweni

The recent spate of violence and looting has exacerbated the crisis faced by an already fragile economy and business community.

A multitude of businesses, already severely affected by the Covid-19 pandemic, have been devastated, destroyed and gutted by looters and left with few options for survival.

Some of these businesses may have insurance, but a lot do not, as it is simply not affordable. Even those that do, have to continue paying overheads while waiting for an insurance payout, which may well take a long time, without being able to trade and generate an income.

Such eventual insurance payouts can in any event not compensate for the loss of customers, goodwill and the inability to trade.

It is, therefore, our respectful view that it would be appropriate for Treasury to implement similar measures to assist affected business to rebuild, manage cash flow, and regain some stability, as those measures implemented by virtue of the Disaster Management Tax Relief Act and the Disaster Management Tax Relief Administration Act for the purposes of the Covid-19 disaster. These proposed measures include:

• Deferment of provisional tax payments without interest or penalties.

• Deferment of VAT payments without incurring penalties.

• Deferment of PAYE without incurring penalties or interest.

• A payment holiday from Skills Development Levies.

• Other relief measures.

We are aware of some pending proposals in this respect, but none of these have yet been gazetted, and no mention has been made in terms of possible VAT relief. The payment of VAT by affected businesses, at this time, will place these businesses in an enormous financial predicament.

It is appreciated that these measures will, for a short period, impact on the revenue collected by the SA Revenue Service. However, ithe demise of these businesses will have a much more profound and long lasting effect on the tax base, unemployment, economic growth and investment. It is, therefore, our sincere hope that this proposal will receive due consideration and be implemented on an urgent basis.

GC PAPENFUS I Chief executive National Employers Association of South Africa