The Employment Tax Incentive (ETI) is sponsored by National Treasury and administered by SARS. The programme started in January 2014 and is scheduled to run until February 2029. It was developed to address a specific challenge in South Africa.
The Unemployment Rate in South Africa is currently 29.1% and averages 25.52% from 2000 until 2019, reaching an all-time high of 31.20% in the first quarter of 2003 and a record low of 21.50% in the fourth quarter of 2008 (Trading economics, 2019). It remains to be the 7th highest unemployment rate in the world. The expanded definition of unemployment exacerbates the situation. It includes people who have stopped looking for work. This figure currently hovers around 36% the last few years.
The Youth Unemployment Rate in South Africa averaged 56.91% from 2013 until 2017, reaching an all-time high of 56.91% in the 4th quarter of 2019 (StatsSA, October 2019).
Youth (ages 18-29) comprises 27% (15.2 million) of South Africa’s 56 million citizens.
56.4% (8.6 million) are unemployed!
The Employment Tax Incentive (Act 26 of 2013) was promulgated in October 2013 and forms part of government’s package of programmes to:
Incentivize businesses to employ young people (18-29)
Enable youth employability by giving them the opportunity to acquire the requisite skills to be employed.
“The existing learnership allowance provided for in the Income Tax Act and the Employment Tax Incentive are but two of the initiatives that the government encourages employers to access to increase the levels of employment and skills development.”
~ Source: www.sars.gov.za; 09/12/2014
"The Employment Tax Incentive supports well over 1.1 million unemployed youth in South Africa.”
~ Mr Tito Mboweni, Minister of Finance: March 2019.