Analyst: Businesses will continue to suffer after lockdown

Written by on 21 April, 2020

The National Employers’ Association of South Africa is warning businesses that it is imperative that they start planning for life after lockdown.

It is estimated that the coronavirus pandemic and the nationwide lockdown has put at least 1,5 million South African jobs at risk.

The association’s chief executive, Gerhard Papenfus, says it is clear that businesses are suffering and will continue to do so for a long time.

“During the state of disaster and the lockdown, the contract of employment is suspended. During this period employers have the liberty based on their financial position to decide how and how much they pay their employees. However on the day the lockdown ends that all changes. Employees will turn up for work expecting their normal salaries. business on the other hand will need time to recover, months even to recover. Business needs to plan for this scenario and they need to planning now.”

Meanwhile to aid businesses with cash flow during COVID-19, the government has announced that it will allow employers with a gross revenue of less than 50 million rand to pay only 80% of their employee’s tax liability.

This is for a four month period.

Advocate specializing in tax law, Liezel Tredoux, has warned that this is not a relief, but merely a delay in SARS payments.

“One must remember that this is merely a reduction of the pay as you earn tax liability for the four months beginning on the 1st of April 2020 until the 31st of July 2020. This period is very short in my view, I don’t think it is enough to fully support those businesses that are unable to earn an income due the national lockdown. If you have no income you cannot pay anything to anybody, let alone salaries and the income tax that is payable to SARS on those salaries.”

By: Gagasi FM News


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