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The South African Revenue Service (SARS) has determined that businesses that import essential goods, as defined in the regulations, do not have to pay VAT on these imported goods. However, when the same essential goods are resold locally, the normal VAT rules apply.
The purpose of this regulation is to assist with the cash flow of these businesses, as they now do not have to set-off the VAT paid on imports against the VAT charged on sales, but can simply pay over the full VAT on sales to SARS.
Find out more about SARS Disaster Management Tax Relief below:
Banks will be open and your money will be accessible during the countrywide lockdown.
On Monday, 22 March President Cyril Ramaphosa announced a nationwide 21-day lockdown to be implemented from midnight on 26 March to midnight on 16 April, in an effort to prevent an escalation of the coronavirus pandemic that was recently declared a national disaster.
A lockdown is an emergency protocol that requires all South Africans to stay at home except for essential purposes. All non-essential activities are suspended, however, grocery stores, pharmacies, banks and other essential industries will remain open.
Enabling normal operations
On 24 March, Trade and Industry Minister Ebrahim Patel stated that the banking sector in the country would conduct business as usual during the lockdown period.
Patel said: “The government is doing what it can to minimise the negative impact on the ability of customers to manage their finances during the national disaster. This includes enabling business and private individuals to continue their normal operations.”
This means there is no need for customers to withdraw all their funds during the lockdown period. Your money can remain in the bank and you will be able to withdraw it whenever needed. Some branches will be closed, so if you need to visit a branch, you should check your bank’s website to find the open branches nearest to you.
Patel said that the exemptions will also allow essential payment systems to operate, including:
- The continued availability of banknotes to ATMs, branches and businesses
- The continued provision of essential ATM, branch and corporate banking services
- The continued provision of electronic payment systems
Patel also said the management of debtors and the extension of credit will continue as long as the national disaster conditions exist, with the following measures to be implemented for business and individual debtors experiencing financial stress:
- Banks will institute payment arrangements and debt relief programmes
- Limitations will be set on the repossession of assets
- The extension of credit lines.
A number of local banks have already committed to helping businesses and customers to cope with the impact of the coronavirus. As South Africa and the world confront the public health, financial and economic implications of the Covid-19 pandemic, Absa Group is rolling out an extensive relief programme for eligible customers impacted by Covid-19.
We realise that this is a difficult time for our customers and businesses whose financial means are being negatively affected. After careful consideration and engagements with regulators, we are introducing a comprehensive customer, business and corporate relief programme, effective on Monday, 30 March 2020 – Daniel Mminele, Absa group chief executive.
“The programme is in line with the principles of an industry-agreed approach (see https://www.banking.org.za/news/banks-respond-to-covid-19/). We urge those of our customers who are able to continue making their payments, to do so. This will enable us to extend these measures to many more who are in a less fortunate position.”
Eligible customers in need of short-term liquidity relief will qualify for the relief programme that applies to Absa’s credit products. These relief measures will be available to Absa’s corporate, wealth, business bank, private bank and retail customers.
The programme incorporates a three-month payment relief and allows customers in need of short-term financial assistance to reduce their monthly instalments. Customers in good standing – with up-to-date accounts – who have been financially distressed by the pandemic will have the opportunity to apply for payment relief to assist with cash flow needs. Customers who are unable to continue paying, as usual, will be able to sign agreements with the bank to pay reduced instalments or to defer payments for up to three months.
“Relevant agreements will be adjusted by revising the loan period and capitalising interest during the relief period. Crucially, this programme will not attract additional administration fees for customers. Support to corporate and business banking clients will entail solutions based on their specific requirements and operations,” said Arrie Rautenbach, chief executive of Absa Retail and Business Banking (RBB) South Africa.
“The programme is testament to our commitment to finding real, customer-focused solutions, in a time of great uncertainty for everyone.” Businesses and corporates are encouraged to contact their relationship managers for further details. The principles applicable to this relief programme in South Africa are extended to Absa’s other markets in Africa and will be implemented subject to the various conditions, laws and regulations applicable in each country.
“Absa campuses also have small and medium-sized enterprises (SMEs) such as hairdressers, pharmacies, florists and coffee shops, among others as commercial tenants. In recognition of the role SMEs play in creating jobs and sustaining livelihoods, these businesses have been granted a rental respite for the next three months.
“We will continue to monitor the situation closely and adjust our relief programme where necessary,” concluded Mminele.
For home owners, you can access funds from your Absa home loan during the lockdown period through the FlexiReserve and the ReAdvance facilities. You can gain access to these facilities using internet banking, Absa’s banking app or the helpline.
If you have deposited extra funds into your home loan over and above your regular monthly repayments, you can access these funds whenever you need them through the FlexiReserve facility.
- A minimum of R1,000 may be transferred out of your FlexiReserve facility
- The maximum transfer limit allowed through internet banking, ATM or by telephone is set by you. You can change any of the daily limits on these services
- You cannot make cash withdrawals or third party payments directly from the home loan account
You can apply to take your existing home loan back up to the original loan amount granted with ReAdvance, without being required to register any further bonds over the property, and no attorney fees are charged for this. However, the necessary credit, risk and affordability assessments need to take place before these funds can be accessed.
“The exemptions will allow banks to work together in ensuring the continued functioning of the payments system, a critical component of the financial system. This includes sharing information and resources to ensure the continued availability of banknotes to ATMs, branches and businesses,” said Patel during his announcement on March 24. “In terms of the National Disaster Management Act, these regulations shall remain in operation for as long as the Covid-19 disaster subsists, or until they are withdrawn.”
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With the implementation of the national lockdown by President Cyril Ramaphosa on 26 March, there has been understandable confusion. While some employees have been told that continuing to work is unlawful, others are legally obliged to continue working. How do you know which category you fall into, and what are your rights in each case?Read More