Pretoria - President Jacob Zuma has signed the proposed Employment Tax Incentive bill into law following years of consultations.
The signing of the Bill into law, which was published in the Government Gazette on Wednesday, will pave the way for job creation for young workers and those in special economic zones.
In a statement on Thursday, the National Treasury said: “The Act will encourage private employers to employ young workers by providing a tax incentive to employers, with government sharing the costs of such employment for a maximum of two years under certain conditions.
“This tax incentive can also be used to provide jobs to the many matriculants and other school leavers who will be entering the labour market.”
The signing of the tax incentive into law comes after government put the then proposed tax incentive, then called the Youth Wage Subsidy, on ice to allow consultations with labour unions and business at the National Economic Development and Labour Council (Nedlac) to take place.
The incentive was first announced by President Jacob Zuma in 2010 against the concerns of an increasing rate of unemployment amongst young people.
After the announcement, Finance Minister Pravin Gordhan later introduced it during his 2010 Budget. These announcements were followed by the publication in February 2011 of a discussion paper, “Confronting youth unemployment: policy options for South Africa”.
It was then referred to Nedlac for consultations, and National Treasury said the comments made at Nedlac had been included in the newly approved draft Bill.
The Act will take effect on January 2014. – SAnews.gov.za
