CAPE TOWN: The implementation of the Employment Tax Incentive (ETI) Act in South Africa has resulted in 270,000 young people getting jobs since it came into effect at the beginning of last year, according to National Treasury spokesperson Jabulani Sikhakhane here the other day.
“Information received from the South African Revenue Service (SARS) indicates that employers have claimed the incentive for at least 270,000 employees up until the end of December 2014,” Sikhakhane said. “National Treasury is working with SARS to use the data that is included in the biannual reporting requirements from employers to create a more detailed assessment of the impact of the ETI on youth employment.”
Sikhakhane confirmed that the National Treasury will continue to monitor the implementation of the incentive, but said that the initial take-up of the ETI has been “higher than expected.” He said “the incentive will be up for review in 2016, when adjustments may be made to improve its impact and effectiveness.”
The ETI’s current phase is aimed at helping young, first-time workers between the ages of 18 and 29 find employment. These age restrictions do not apply to the employees of companies operating in special economic zones.
The ETI decreases pay-as-you-earn (PAYE) tax liability for employers, who can claim a rebate of up to 50 percent for eligible South African employees added to their books on or after October 1, 2013.
The value of the ETI decreases by half during the second year. An employer may only claim the incentive for a two-year period for each qualifying employee, and the incentive is due to be available, in its first phase, until December 31, 2016.
