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Cash Windfall Looms For Employers

29 March 2010   (0 Comments)
Posted by: Author: Jackie Cameron
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Cash Windfall Looms For Employers

Hire a young person for two years, and let SARS foot the bill

Hire a young person without work experience for two years, and your company will get its money back from SARS.That, in broad brushstrokes, is one of Minister of Finance Pravin Gordhan’ s proposals to help boost employment numbers.

At least 800 000 people are expected to qualify initially for the tax incentive. Under consideration is a cash reimbursement to employers, operating through SARS payroll system and subject to minimum labour standards."It will be available to tax-compliant businesses, non-governmental organisations and municipalities,”said Gordhan of the proposed subsidy.

Speaking in Parliament when he unveiled South Africa's annual national budget, Gordhan said that job creation was a priority, and one component of the employment strategy is to promote job creation for the youth.

South Africa is being positioned on a new growth path aimed at job creation, poverty reduction and faster economic growth, he said during a media briefing. "We agree with COSATU. Our economy needs to be transformed to meet the needs of all of our people.We also agree that growth on its own is insufficient to solve our unemployment problem.We need to expand the capacity of the economy to grow sustainably, and we need growth that is more labour absorbing.”

Gross job creation has nearly halved over the past 12 months as companies have cut back on hiring, noted the national treasury in a report.Young, lower-skilled, and male workers have been most affected. But regardless of age, the overall unemployment estimate is grim.Only 44% of South Africa's working-age population had a job,compared with an international rate of about 60%, "even before last year's recession”.The Budget Review 2010 states that mining employment has declined more than 40% since the1990s.

Bucking the trend, meanwhile,has been the financial services sector, which continued to create jobs in 2009."Finance, insurance,real estate, and business services …have been responsible for 30% of South Africa’s growth since 1994,and account for 21% of GDP,” said the review.

Also swelling in number has been the civil service, with an additional 300 000 state jobs created between 2001 and 2008, its aid. Expanded public works programmes have contributed to short-term job creation.Gordhan emphasised the need for economic growth in order to make a "sustained impact on unemployment”.

Source: By Jackie Cameron (Tax breaks)


Section 240A of the Tax Administration Act, 2011 (as amended) requires that all tax practitioners register with a recognized controlling body before 1 July 2013. It is a criminal offense to not register with both a recognized controlling body and SARS.


The Act requires that a minimum academic and practical requirments be set to register with a controlling body. Click here for the minimum requirements of SAIT.

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