Tax snippets

Report back on the Employment Tax Incentive Act – How is it doing?

We reported previously that a subsidy was available for businesses if they employed people between the ages of 18 – 29.

The subsidy is paid through the PAYE system by SARS and commenced in January 2014.

By December 2014 more than 270,000 people had been employed by approximately 29,000 businesses.   This is a very positive response as youth unemployment was running at 70% or 3.3 million people.

We will have to wait a while to understand the full impact on unemployment but common sense tells us that 270,000 young people getting experience in the work place will have positive benefits for the economy and unemployment.

Tax: Delays in the ETCS

Any entity doing business with a state institution requires a Tax Clearance Certificate (TCC) from SARS. The TCC confirms that all of the tax affairs of the business are up to date and in order.

To curb abuses in the supply chain management system, government decided to introduce an Electronic Tax Compliance System (ETCS) whereby government officials could check on an entity’s tax status. The system involved a PIN code being issued to the requisite government officer whereby entering the PIN would electronically display the entity’s tax status in real time. If for example, a taxpayer had failed to pay his PAYE, the ETCS would be updated. Thus, if the taxpayer was owed money, he would be obliged to make good the PAYE before being paid.

The system will also benefit taxpayers as they are saved the process of applying for a tax clearance.

The aim was to introduce this system in the final quarter of 2014 and to abolish the issuing of TCCs by April 2015.

However, the system has been delayed with no date given for implementation of ETCS.

Loadshedding: Are Employees Entitled To Wages During A Power Outage?

We are back to loadshedding and it looks as though it is going to continue for a while.

This brings us to the question of whether employers have to pay workers during load shedding. Legal commentators are suggesting that –

  • If employees are available to work, then they are entitled to payment. So even if the blackout prevents them from performing their tasks, the employer is obliged to pay wages.
  • The situation is different for workers who get paid for an outcome (e.g. sales commission). Here there is no obligation to pay if these people come to the workplace.
  • Should the power outages have a major impact on the workplace, there is nothing to stop the employer from negotiating with employees for lower or even no pay during power cuts. This may help both parties as potentially workers could face retrenchment, whilst employers save on costs.

Labour Law being the specialised field that it is, take full advice on your particular circumstances in any doubt.

This article is a general information sheet and should not be used or relied on as professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact your financial adviser for specific and detailed advice.

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