South Africa's National Treasury has given the go-ahead for a 10-year extension of the Employment Tax Incentive (ETI) to February 2029.
The decision comes following a review of the viability and impact of the ETI, which was introduced in 2013 to encourage more young workers into employment and provide them with work experience. Under ETI, the cost of hiring is shared between employers and the government.
Tax-compliant employers in the formal, private sector are entitled to Pay As You Earn tax reductions if they hire a qualifying candidate. ETI candidates must be between 19 and 29 years of age and earn no more than R6,000 (US$408) a month.
According to Polity, these workers often lack the skills and tertiary education to enter the job market in any other way as employers tend to go for more experienced, skilled candidates. As a result, the aim of the ETI is to incentivise companies to hire people they would not necessarily have considered otherwise.
Research carried out by the Treasury in 2016 found that in the case of 56% of employers, the ETI had contributed to them hiring more young people.
Emma Woollacott is a freelance business journalist. Her work has appeared in a wide range of publications, including the Guardian, the Times, Forbes and the BBC.
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South Africa's National Treasury has given the go-ahead for a 10-year extension of the Employment Tax Incentive (ETI) to February 2029.
The decision comes following a review of the viability and impact of the ETI, which was introduced in 2013 to encourage more young workers into employment and provide them with work experience. Under ETI, the cost of hiring is shared between employers and the government.
Tax-compliant employers in the formal, private sector are entitled to Pay As You Earn tax reductions if they hire a qualifying candidate. ETI candidates must be between 19 and 29 years of age and earn no more than R6,000 (US$408) a month.
According to Polity, these workers often lack the skills and tertiary education to enter the job market in any other way as employers tend to go for more experienced, skilled candidates. As a result, the aim of the ETI is to incentivise companies to hire people they would not necessarily have considered otherwise.
Research carried out by the Treasury in 2016 found that in the case of 56% of employers, the ETI had contributed to them hiring more young people.
Emma Woollacott is a freelance business journalist. Her work has appeared in a wide range of publications, including the Guardian, the Times, Forbes and the BBC.
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