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TAX TALK

TAX TALK

Author: Natalie Wocke
Date: 2014-05-23
YOUTH EMPLOYMENT TAX INCENTIVE...POTENTIAL TO BENEFIT ANY SIZE BUSINESS - SMALL AND LARGE.

The South African Revenue Service (SARS) is starting to make inroads on a course of action that incentivises only compliant taxpayers, offering incentives to those up to date with all their taxes. The first of these is the "The Youth Employment Tax Incentive".

It has recently been proposed that certain incentives offered to Small to Medium size businesses (SME's), are amended/replaced with incentives that enable only compliant, up to date taxpayers to claim tax incentives. Although not in place yet, it seems we are going to see a shift towards this way of thinking. "Tax compliance", will be the buzz word.a tax clearance certificate your passport to trading.

With this in mind, there is an excellent tax incentive available to compliant taxpayers, who are "eligible employers", with "eligible employees".

The Youth Employment Tax Incentive is an excellent incentive, allowing a reduction/ claim-back of some of the PAYE you pay over to SARS.

The Preamble to the Youth Employment Tax Incentive Act sets out the objective of the incentive. Broadly, this is to address the high unemployment rate in the Republic. The initiative also aims to share the cost of expanding job opportunities with the private sector, by giving something back to eligible employers. (The incentive is not available to the Public sector.)

The initiative incentivises the employment of youth, from 18 to 29 years old, by the Private Sector. This is achieved through a reduction in the PAYE bill the employer is liable to pay, and further through a refund mechanism (still to be finalised), which will result in real tax savings for qualifying employers, employing qualifying employees.

To find out details of who is eligible to claim this incentive, read on next week, or contact Roberts and Chaplin on 032 586 0387, or 032 947 1010.