It is attempting to further alleviate the financial stress suffered by companies, but the amendments may not be enough.
The South African Revenue Service has issued further guidelines for companies and individuals wanting to apply for Covid-19 relief. The latest set applies to large businesses with gross income of more than R100 million, and small businesses with gross income of less than R100 million.
The taxpayer must have suffered “serious financial hardship” which must be attributable to the effects of the Covid-19 disaster; the effects must be “substantial and material”, and the taxpayer must prove to Sars that an instalment payment arrangement is required because of the impact of Covid-19.Serious financial hardship
Sars’s response: “Hardship relates to whether your business has suffered negative cash flow impact as a result of Covid-19 and the business is not able to pay all the tax liability when such becomes due.”Sars was also asked to clarify what is meant by substantial and material. Williams further ventures that within the Paja context, the term ‘material’ is “based on the meaning that the thing matters, or is not immaterial, and so this includes a relevance aspect as well as that the amount must not be so insignificant that a court would disregard it .
Elle-Sarah Rossato, tax controversy and dispute resolution lead at PwC, notes that Sars “might suffer to deal with all the requests of above R100 million taxpayers; make sense of ‘substantial and material’ as well as ‘serious hardship’; and struggle to be consistent with outcomes to ensure that all suffering taxpayers are treated fairly and reasonably as suggested by government and National Treasury.
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