Employment Tax Incentive given a boost
Sandra Dunn, INSETA’s CEO.
Nhlanhla Musa Nene, Minister of Finance, recently gave notice that section 10 of the Employment Tax Incentive Act, 2013 (Act No. 26 of 2013) came into operation on 19 December 2014.
Sandra Dunn, INSETA’s CEO says this will boost the employment tax incentive (ETI).
Lion of Africa’s Executive for Strategic Planning and Corporate Affairs, Mashudu Mamathuba agrees, ”Companies who’ve had to roll over the amounts due to them by SARS in terms of the ETI, will undoubtedly now be very relieved since they can now claim the excess amount due to them.”
Section 9 of the ETI, allows for the roll-over relief for employers and section 10, provides for a date to be announced by the Minister of Finance, from when companies can claim amounts due in terms of that section.
The roll-over relief helps companies to claim the amount by which the ETI exceeds their PAYE that might be due in any month for ‘future use’ – when submitting their monthly PAYE returns. Companies can a) either reduce the PAYE that is due in the following month; or b) during a period of tax debt or when a tax return must be submitted. Companies who have had to do the latter, had to wait for the Minister to announce the date from when reimbursements can be claimed.
Now that the Minister has done this, companies have more certainty with regard to when they can anticipate the roll-over relief to materialise.
Dunn believes, the announcement may also be a lifeline for thousands of matriculants who are eligible to enter college or university, but who could not register this year due to the limited space available at our tertiary institutions.
“Tertiary institutions are hopelessly oversubscribed – on average each institution receives 4 to 6 times more applications than the number of students that they can accommodate.”
The best option for the matriculants who fail to be admitted to any tertiary institution is to pursue employment – employers who employ ‘qualifying employees’ will benefit from the ETI and might therefore consider employing more young people, than what they otherwise would have.
“If employers in the insurance industry, for instance, leverage the ETI, with INSETA’s learnership and internship support programmes, they can substantially expand their intake of young employees,” says Dunn.
Leading experts agree that there are structural challenges that must be addressed before the lack of capacity at tertiary institutions, including the TVET Colleges can be addressed. It will therefore take years before the ‘surplus’ thousands of matriculants who would like to and who qualify to enroll with tertiary institutions, but who ‘just can’t get their foot into the doors of higher learning’, can be accommodated.
Dunn adds that in the meanwhile, instruments such as the ETI and the SETAs learnership and internship programmes as well as the national and provincial governments’, ‘work readiness’ programmes, must be optimally utilised to offer a much needed lifeline for the matriculants.
Mamathuba says this is exactly Lion of Africa’s philosophy. “The ETI and the announcement of the date for claims for roll-overs lend credence to companies like Lion of Africa’s commitment and roll-out of an aggressive strategy to employ, train and equip as many young people as possible.”
“Lion of Africa Insurance is a culmination of a struggle throughout my commercial life,” says Adam Samie, Lion of Africa’s CEO as quoted in Forbes Africa, It’s Africa’s Time.
Samie can certainly empathise with the matriculants who feel destitute and disappointed with a system that has let them down.
In the same feature Samie adds,“That is why we partner with organisations such as INSETA to develop young South Africans and set them off on a career path that will not only change their lives but the country’s and their communities as well. Transforming a country means building an entirely new middle-class of skilled professionals.”
