Question NW3226 to the Minister of Finance

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02 October 2015 - NW3226

Profile picture: Lees, Mr RA

Lees, Mr RA to ask the Minister of Finance

(1)With reference to his reply to question 68 on 17 March 2015, (a)(i) how many employers and (ii) employees have claimed the Employment Tax Incentive (ETI) in each month since 1 January 2014 and (b) from which economic sectors and/or industries are the specified (i) employers and (ii) employees; (2) how many beneficiaries have been de-registered as eligible to claim ETI as at the latest specified date for which information is available?

Reply:

  1. Total claims for the employment tax incentive amounted to R3.9 billion since the start of the programme on 1 January 2014 up until the end of July 2015, with claims by 36 616 unique employers. It must be noted that, like most tax incentives, the data I am providing on the Employment Tax Incentive is preliminary and will be significantly revised once the more accurate annual tax returns are submitted by employers to SARS, and after they have been audited by SARS. The current data I am providing is from the monthly returns to SARS from employers, which are also not audited and hence subject to significant revision. Given that the most accurate information on any tax incentive is sourced from the annual tax returns made by taxpayers, which may only be available with a lag of up to 18 months, more accurate data on any such tax incentive is only available with a lag of at least two years, as the annual returns also have to be audited by SARS.

(a) (i) According to the monthly returns from employers, over the period 1 January 2014 up until the end of July 2015, the employment tax incentive has been claimed by 36 616 unique employers.

(ii) It is not possible to provide information on how many employees were employed for which the incentive was claimed by those employers from the monthly returns. This is because although it was possible to estimate the minimum number of employees for whom such incentive is claimed for the first year of this incentive from this source of data, this is no longer possible from the second year commencing from 1 January 2015 because the maximum incentive per employee varies and may be R500 or R1 000 (as it halves for those employees that have been employed for more than a year). Hence dividing by a single maximum of R1 000 is no longer possible to determine the minimum number of claimant employees, as could be done for every month of the first year of implementing the incentive.

The table below indicates the value of claims that can be attributed to employment in each month, and you will see that we stop projecting for the number of claimant employees for the reason outlined above. It must be noted that the updated numbers in the table will not coincide with previously reported figures as they may be based on more, or updated, returns by employers or SARS, which also takes into account any claims that may have been corrected after the normal engagements between the taxpayer and SARS.

ETI claimed by period*

Period

ETI (R 000s)

Count of employers claiming per month

Number of claimant employees**

January-2014

53 888

5 188

53 888

February-2014

125 833

10 114

125 833

March-2014

140 116

13 823

140 116

April-2014

158 993

15 321

158 993

May-2014

171 589

16 128

171 589

June-2014

201 297

17 091

201 297

July-2014

208 741

17 826

208 741

August-2014

227 941

18 561

227 941

September-2014

213 733

19 062

213 733

October-2014

251 475

19 287

251 475

November-2014

253 126

19 317

253 126

December-2014

254 151

17 280

254 151

January-2015

222 226

18 981

 

February-2015

317 121

20 045

 

March-2015

213 570

17 518

 

April-2015

211 336

17 852

 

May-2015

216 169

18 342

 

June-2015

218 697

18 680

 

July-2015

226 932

18 190

 

TOTAL

3 886 935

 

 

* The updated numbers in this table will not coincide with previously reported figures as they may be based on more, or updated, returns by employers.

**The minimum number of employees is an indicative lower bound of the number of employees in respect of whom employers have claimed the incentive. It is calculated as the total ETI claims divided by R1 000 – the maximum claim for the first twelve months of claiming the ETI. This can only be applied for 2014, as in 2015 some employees may be in their second twelve months of claiming the ETI, where an employer may claim a maximum of R500 per month per employee.

The number of employees as reported in the table above are likely to be higher as some ETI employees would be qualifying for claims of less than R1 000.

(b) The available data do not yet allow for a detailed sectoral breakdown at either the employer or employee level, but it appears that the bulk of the claims come from the Wholesale and Retail, Financial and Business Services, Manufacturing and Agricultural sectors as classified by SARS. The total monthly claims vary according to income received in a particular month, the maximum allowable claim in a particular month, and the number of employees in respect of whom employers claim the incentive.

2. According to section 5(1)(b) of the Employment Tax Incentive Act, only the Minister of Finance may disqualify an employer from claiming the employment tax incentive. To date there are no employers that have been disqualified from claiming the incentive, as no evidence has been presented to the Minister to satisfy the conditions for disqualification. However, the South African Revenue Service monitors the eligibility of employer claims that are made and disqualifies claims that do meet the qualifying criteria.

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