In his budget speech, Finance Minister Pravin Gordhan said, “One of our most pressing development challenges is to expand work opportunities for young people. There has been extensive debate on how this should be done.
“The answer is that a wide range of measures are needed, including further education, training, public employment opportunities and support for job creation in the private sector.
“To complement existing programmes, a tax incentive aimed at sharing the costs of employing young work-seekers will be tabled for consideration by Parliament. It will help young people enter the labour market to gain valuable experience and access career opportunities. A similar incentive is proposed for eligible workers of all ages within special economic zones”
Job incentive widely welcomed
Sanlam Business Market’s marketing head, Kobus Engelbrecht, says the youth employment tax incentive would encourage the hiring of young people.
The incentive will create a graduated tax incentive at the entry-level wage, falling to zero when earnings reach the personal income tax threshold..
Candice Aletter, Tax, at Pricewaterhouse Coopers says government has shown it is serious about the employment of youth.
The aim of the employment tax incentive is to help young people to enter the labour market, gain valuable experience and have access to career opportunities. Aletter says, “In conjunction with this initiative the proposed Employment Services Bill of 2010 will assist with addressing the unemployment of young people through the creation of work schemes.
The CEO of the South African Chamber of Commerce and Industry, Neren Rau, also welcomed the roll-out of the youth employment incentive scheme.
For a full transcript of the budget speech, click here.