Revised Taxation Laws Amendment ActSA progress on ETI Changes:

Revised Taxation Laws Amendment Act

South African employers should be aware that the Taxation Laws Amendment Bill was enacted on 11 January 2017.

This paves the way for the promulgation of the Employment Tax Incentive (ETI) which was waiting in the wings until the Taxation Laws Amendment Bill came into effect.

CRS Technologies is your trusted advisor and service provider, and it is our job to ensure that we bring you the latest information with an explanation of how this can affect your business planning.

There are a number of implications for local businesses and it is important that decision makers understand these.

To this end, it is important to know:-

  • Following recommendation by Finance Minister Pravin Gordhan the section regarding the R20 million cap on ETI claims has been scrapped and is not part of the Taxation Laws Amendment Bill
  • Going forward SARS and Treasury will monitor the affordability of the programme. Should cost-containment of the ETI program be required, the imposition of a cap will be reviewed.
  • Unpaid hours (e.g. unpaid leave) will no longer be counted towards the 160 hours to determine a full month.
  • Any unclaimed ETI amount as at the end of February 2016 and the end of August 2016 may not be rolled over into the next 6-month period.
  • The expiry date for ETI has been extended until 28 February 2019.

Another component to take into consideration is learnership allowances (incentive).

The tax deduction value will be based on the NQF level of the learner, and will be higher for qualifications up to NQF level 6 and lower for qualifications from NQF level 7 and higher.

The expiry date for the incentive has been extended until 31 March 2022 and this applies to learnership agreements entered on or after 1 October 2016.

Our experienced legal team is always available for any questions, queries or to offer general advice.