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In his statement on Friday, Minister of Finance Tito Mboweni announced how the R500 billion economic support package will be distributed.
Mboweni said that the government has come up with a fiscal package of approximately R500 billion, while the South African Reserve Bank (SARB) has come up with a monetary policy package estimating R300 billion. Thus bringing the collective package to approximately R800 billion.
The government’s policy will focus on the following:
- A budget of R20 billion allocated to health
- Providing help to people in need of food and social distress
- Supporting companies and their employees
- The phased re-opening of the economy
- Supportive monetary and fiscal measures
The breakdown included the following:
- In May, child grant beneficiaries will receive an extra R300
- From June to October, an additional R500 per month will be allocated to caregivers
- All other grants will be increased by R250 for the next six months
- A Covid-19 Social Relief of Distress grant of R350 will be paid to people who are unemployed and do not receive any other grants or UIF payments, for the next six months
The following tax relief measures were proposed:
- Increasing the expanded employment tax incentive to R750 per employee
- From 1 May, there will be a four-month skills development levy break
- VAT refunds to be completed sooner
- Deferring excise duties
- Three-month deferral for the reporting and payment of carbon tax liabilities
The Finance Minister said the government will aim to preserve the economy, attempt to recover from the effects of the crisis and pivot the economy for sustainable growth.
Mboweni is set to announce the revised budget to Parliament elaborating on the measures that will be taken.
