In an address to the nation of the 23rd of March, President Cyril Ramaphosa announced a nation-wide lockdown to combat the spread of the COVID-19 disease in South Africa. “Our analysis of the progress of the epidemic informs us that we need to urgently and dramatically escalate our response,” he said.
The lockdown is due to last from midnight on the 26th of March until the 16th of April. “Non-essential” businesses will be forced to close their doors – though they may continue to operate remotely – and South Africans have been ordered to stay indoors. “While this measure will have a considerable impact on people’s livelihoods, on the life of our society and on our economy, the human cost of delaying this action would be far, far greater,” Ramaphosa said.
The lockdown presents an escalation of the measures put in place by last week’s announcement of a National State of Disaster, which included travel restrictions, the closure of schools and higher learning institutions and prohibitions on the sale of alcohol after 6pm, as well as gathering in excess of 100 people.
“In South Africa, the number of confirmed cases has increased six-fold in just eight days from 61 cases to 402 cases,” Ramaphosa explained. “It is clear from the development of the disease in other countries and from our own modelling that immediate, swift and extraordinary action is required if we are to prevent a human catastrophe of enormous proportions in our country.”
In addition to announcing a range of far-reaching and critical social intervention – including the establishment of the Solidarity Fund, where companies and individuals can donate to fight the spread of the virus – Ramaphosa also outlined the Government’s plans to help businesses survive this “potentially catastrophic” period.
Some of the President’s remarks that could prove relevant to businesses in the AV sector include:
- “We are in consultation on a proposal for a special dispensation for companies that are in distress because of COVID-19. Through this proposal employees will receive wage payment through the Temporary Employee Relief Scheme, which will enable companies to pay employees directly during this period and avoid retrenchment.”
- “Any employee who falls ill through exposure at their workplace will be paid through the Compensation Fund.”
- “Commercial banks have been exempted from provisions of the Competition Act to enable them to develop common approaches to debt relief and other necessary measures.”
- “Many large companies that are currently closed have accepted their responsibility to pay workers affected. We call on larger businesses in particular to take care of their workers during this period.”
- “In the event that it becomes necessary, we will utilise the reserves within the UIF system to extend support to those workers in SMEs and other vulnerable firms who are faced with loss of income and whose companies are unable to provide support. Details of these will be made available within the next few days.”
- “Using the tax system, we will provide a tax subsidy of up to R500 per month for the next four months for those private sector employees earning below R6,500 under the Employment Tax Incentive. This will help over 4 million workers.”
- “The South African Revenue Service will also work towards accelerating the payment of employment tax incentive reimbursements from twice a year to monthly to get cash into the hands of compliant employers as soon as possible.”
- “Tax compliant businesses with a turnover of less than R50 million will be allowed to delay 20% of their pay-as-you-earn liabilities over the next four months and a portion of their provisional corporate income tax payments without penalties or interest over the next six months. This intervention is expected to assist over 75 000 small and medium-term enterprises.”
- “We are exploring the temporary reduction of employer and employee contributions to the Unemployment Insurance Fund and employer contributions to the Skill Development Fund.”
- “The Department of Small Business Development has made over R500 million available immediately to assist small and medium enterprises that are in distress through a simplified application process.”
To read President Ramaphosa’s address in full, please click here.