South Africa: the impact of the Draft Disaster Management Tax Relief Administration Bill, 2020 on the time periods for tax matters

The Draft Disaster Management Tax Relief Administration Bill, 2020 (“Bill”) was released for public comment on 1 April 2020 and once signed into law, will take effect from that date.

The purpose of the Bill is stated to be as follows: “To provide for tax measures in order to assist with alleviating cash flow burdens on tax compliant small to medium- sized businesses arising as a result of the COVID-19 pandemic and lockdown, and to provide for matters connected therewith.”

The Bill deals with the deferral of employees’ tax (clause 2), the deferral of provisional tax (clause 3), the deferral of interim payments (clause 4) and the extension of certain time periods (clause 5).

Impact on tax disputes

Clause 5 of the Bill provides that the period of the national lockdown (defined as the period of 26 March – 16 April or as extended), must be regarded as dies non for a time period prescribed in the dispute resolution rules.

What this means is that time periods prescribed in the Tax Administration Act, 2011 (“TAA”) and the rules and regulations promulgated thereunder in certain circumstances will be frozen during the period of the national lockdown thereby providing taxpayers much-needed relief from having to comply with onerous time periods during the national lockdown.

The circumstances where this is applicable, ie, where relevant time periods will be extended by the length of time of the national lockdown, include, but are not limited to the following:

Notice for the production of relevant material in terms of section 47 of the TAA, if such notice requires a taxpayer to attend an interview on a date within the national lockdown;
Notice of a field audit in terms of section 48(1) of the TAA;
Notice to appear at an inquiry in terms of section 53 of the TAA;
Prescription rules in terms of section 99(1) of the TAA;
The finality of assessments or decisions in terms of section 100 of the TAA;
Dispute resolution under Chapter 9 of the TAA and the related rules promulgated under section 103 of the TAA.

The extension of time periods clause also applies to various aspects of customs and excise legislation.

Significantly, there does not appear to be any relief for payment obligations of taxpayers who are disputing assessments and therefore the normal pay-now-argue-later rules governed by section 164 of the TAA continue to apply.

Comments on the Bill were due on 15 April 2020.

Reviewed by Robert Gad, an Executive in ENSafrica’s Tax department.

Taryn Solomon
Principal Associate | Tax
tsolomon@ENSafrica.com
+27 82 351 5158

COVID-19, also known as the Coronavirus, is an infectious disease caused by severe acute respiratory syndrome coronavirus 2 (SARS-CoV-2) that was declared a pandemic by the World Health Organization on 11 March 2020. The disease has since been reported in over 190 countries.

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