More companies likely to go into business rescue, warns Kieswetter
The South African Revenue Service (SARS) says the limited economic activity during the COVID-19 pandemic will see many businesses close their doors.
While some South African businesses have resumed economic activity, the national lockdown has left many others with no choice but to close their doors and retrench their staff.
Speaking at a media briefing on Tuesday, SARS commissioner Edward Kieswetter warned that more companies are likely to go into business rescue as they battle to stay afloat.
“A major concern from a revenue perspective is not only a downward trend in economic activity but really that a loss in economic capacity which will result from businesses closing down and job losses."
“Many businesses will not be able to operate profitably at the reduced capacity.”
On Tuesday, Comair announced that the impact of the COVID-19 pandemic on the airline industry has forced it to file for voluntary business rescue.
READ: Comair placed under business rescue plan
The airline has not been in operation since March due to the ban on flights as the governments seek to control the coronavirus outbreak.
Kieswetter predicted that Comair is the first of many more.
“The downward spiral will continue and will be reflected throughout the economy."
“We expect the number of companies who will apply for business rescue will continue to grow in this current year.”
Retail giant Edcon is also among the businesses that admitted to struggling to stay afloat, also applying for voluntary business rescue last week.
