The National Assembly passed two bills, which are commonly referred to as the COVID-19 Tax Bill and the COVID-19 Tax Administration Bill, that were introduced in June by Minister of Finance Tito Mboweni, according to a statement from the assembly. The two bills will now be sent to Parliament's other house, the National Council of Provinces, for concurrence, the assembly noted.
The COVID-19 Tax Administration Bill would alleviate cash flow burdens on small to medium-size businesses, in part by deferring employees' taxes in some cases. The COVID-19 Tax Bill would, among other provisions, increase the limit on annual donations to the country's Solidarity Fund, an independent organization created by the government in March to administer relief and aid during the crisis.
Mboweni had introduced the bills as part of a special adjustment budget that was designed to deal with the "lockdown and resultant economic downturn" associated with the pandemic brought on by the novel coronavirus, which causes the respiratory disease COVID-19, according to the statement.
Earlier Tuesday, Mboweni urged Parliament to act on the two bills, noting they reflect only a portion of a "much broader package" announced by President Cyril Ramaphosa to combat the impact of the pandemic. The finance minister said that while a tax revenue shortfall is expected due to the reduction in economic activity, "the tax system is an excellent mechanism to provide the quickest possible boost to cash flows."
Citing amendments that have already been implemented, Mboweni reiterated that "the crisis we have been facing was swift in its arrival and severe in its impact and required a comparably speedy and substantial response."
He added, "It would have been unwise to wait for too long before providing support to businesses and households."
--Additional reporting by Alex M. Parker. Editing by Vincent Sherry.
For a reprint of this article, please contact reprints@law360.com.
