South Africa’s National Treasury said on Sunday it was introducing a new tax subsidy of 500 rand ($28) per month for each worker to employers for the next four months to cushion financial losses suffered by firms due to the coronavirus.
In a statement, the treasury said it would also permit businesses with revenue of 50 million rand or less to delay paying 20 per cent of their employees’ tax liabilities over the next four months.
“The tax adjustments are made in light of the National State of Disaster and due to the significant and potentially lasting negative impacts on the economy from the spreading of the COVID-19 virus,” the treasury said in a statement.
South Africa entered a 21-day lockdown on Friday with people restricted to their homes and most businesses shuttered. The country has reported over 1,180 cases of coronavirus and now faces a near certain deep recession.
The announcement also follows Friday’s decision by Moody’s to cut the country’s debt to subinvestment, meaning all three of the top ratings firms now rank the country at junk.
Earlier, Finance Minister Tito Mboweni told the Sunday Times newspaper South Africa would consider approaching the International Monetary Fund and World Bank for funding to fight the coronavirus.