Youth Wage Subsidy Won’t Make A Difference

Youth Wage Subsidy Won’t Make A Difference

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David Warneke, head of Income Tax Technical at auditing firm BDO South Africa is of the view that the subsidy won’t have much effect on companies.

Warneke adds that the Employment tax Incentive Bill won’t lead to much needed youth employment purely because corporates don’t have enough incentive to participate.

According to the bill, companies that employ youth between the ages of 19 and 29 will only receive R1 000 rebate per month per employee they hire.

This said, should greater incentive be offered, Warneke agrees with COSATU that it could potentially lead to employers ultimately pushing out older, long term employees in order to take advantage of the incentives despite the anti-displacement rules in the Bill.

The bill proposes a youth wage subsidy aimed at encouraging employers, through tax incentives, to create job opportunities for young people aged from 18 to 29 years.

The tax incentive is one of many programmes that will fall under the umbrella of government’s youth employment strategy, including the National Youth Accord.

The hope is that it will stimulate on-the-job training and the development of soft skills through work experience.

 

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