The Employment Tax Incentive Act, 2013 (the ETIA) was published in the Gazette on 18 December 2013 and gives effect to the proposals to subsidise the cost of hiring younger workers as first announced by Government in 2010. According to the Media Statement on the Draft Employment Tax Incentive Bill, this new incentive is aimed at encouraging employers to hire young and less experienced work seekers, as stated in the National Development Plan. The ETIA represents the first phase of the incentive and after a review of the effectiveness of the incentive, a second phase which could include additional policy features and possible refinement may be implemented after two years. In this article we discuss the legislative provisions of the first phase of the employment tax incentive.
JOHANNESBURG – Taxpayers who accidentally reduce their tax liability due to a reasonable mistake without any intent to defraud the Taxman, won’t be subjected to harsh understatement penalties in future. The Tax Administration Laws Amendment Bill was introduced in the National Assembly last week and revises regulations to such an extent that the South African Revenue Service (Sars) won’t impose penalties in cases where the understatement by the taxpayer “results from a bona fide inadvertent error”. This follows criticism from tax practitioners and taxpayers on the harsh penalties previously imposed even where taxpayers had no intention of deceiving Sars.
Parliament adopted the employment tax incentive bill on Thursday as the Treasury prevailed in its three-year battle with trade union movement Cosatu over a youth wage subsidy.Although all opposition parties voted in favour of the bill, they said the standoff had watered it down, let down job-seekers and undermined the National Education Development and Labour Council (Nedlac).
The Draft Employment Tax Incentive Bill, 2013 (“DETIB”) was published by National Treasury during September 2013 and gives effect to the proposals to subsidise the cost of hiring younger workers as first announced by Government in 2010. According to the Media Statement, this new incentive is aimed at encouraging employers to hire young and less experienced work seekers,
The Draft Employment Tax Incentive Bill gives effect to the announcement by the President in his 2010 State of the Nation Address, and the 2010 Budget, that government will table proposals to subsidise the cost of hiring younger workers. The draft bill also gives effect to the 2013 Budget.
Cape Town – Finance Minister Pravin Gordhan drew a line in the sand on state spending on Wednesday, announcing cuts to official perks and giving half of government departments not a cent more in his mid-term budget review. In a last-minute agreement with cabinet, the state is to impose tighter guidelines on cars, accommodation and travel for all government leaders, from ministers to mayors. Gordhan said these would apply from December 1 and would spell an end to official credit cards, million rand vehicles, luxury hotel stays and expensive home upgrades for cabinet members. He told reporters it would also apply to the presidency. Asked about plans to purchase a new presidential jet, Gordhan said if this was necessary, it would be done. The finance minister said he expected the downgrading of official perks with regard to cabinet ministers would save only about R15m, but if applied across all Read More …
Johannesburg – The SA Chamber of Commerce and Industry (Sacci) was “underwhelmed” by Finance Minister Pravin Gordhan’s mini budget. “The message from the minister had few details on planned changes to fiscal policies, and where details were given it was on peripheral matters like austerity measures for senior government officials,” Sacci CEO Neren Rau said in a statement on Wednesday. However, he said Gordhan could be commended for his emphasis on pragmatic economic policy and priorities, on the National Development Plan and investment, and on the fact that a growing economy was critical to government activities. Sacci welcomed comments about the country’s credit rating and government debt, and the commitment to reduce the fiscal deficit. “Much work still needs to be done to present South Africa as an investor-friendly destination,” Rau said. “Fundamentally, the fiscal deficit can only decrease if government spending is cut in a big way, which implies Read More …
Cape Town – Mixed reaction greeted the country’s mini budget framework, with opposition parties saying they were discouraged and the ruling party expressing satisfaction. The MPs spoke to reporters on the steps of the National Assembly on Wednesday afternoon, shortly after Finance Minister Pravin Gordhan tabled the mini budget. Democratic Alliance MP Tim Harris said the speech was full of reassuring rhetoric, but not nearly bold enough in tackling serious economic problems. “He speaks a lot about backing the NDP [National Development Plan], but then doesn’t table any of the practical measures that the NDP talks about, like active labour market policies, labour reform and removing trade barriers,” Harris said. “Without that action, I don’t think we’re going to make progress on stimulating growth, and currently we are growing at about two percent and this is half the rate of Turkey, Chile and Malaysia.”
Gordhan’s mid-term budget speech fulfils prophecies During his medium-term budget policy speech Finance Minister Pravin Gordhan kept the rhetoric upbeat and SA’s purse strings tight, as expected. Finance Minister Pravin Gordhan before the medium-term budget policy speech at Parliament in Cape Town. (David Harrison, M&G) Finance Minister Pravin Gordhan’s medium-term budget policy speech delivered in Parliament on Wednesday was the fulfilment of a general prophecy: he kept the rhetoric upbeat and the purse strings tight. This is the last medium-term budget speech to be heard before the 2014 elections.