Treasury estimates ETI supported 5% of jobs
Changes in the external environment have made it harder to assess whether Treasury’s Employment Tax Incentive (ETI) has led to the creation of new jobs or prevented a further worsening in youth unemployment, the National Treasury said on Friday.
But broadly, it said, the estimates of jobs supported were higher than the initial 2011 projections – when Treasury discussion documents stated that the R5-billion that would be spent on the youth wage subsidy over three years, would supporting 423 000 jobs, of which 178 000 would be new jobs or jobs saved from being lost.
“It is not possible to use descriptive data to determine whether these supported jobs are new jobs, jobs that have been saved from being lost or jobs that would have been created anyway. To make this estimate, it is necessary to make assumptions about what might have happened in the absence of the ETI,” it stated.
Further, data has suggested that the take-up of the ETI has been strong, with R6.06-billion claimed between January 1, 2014, and March 31, this year.
In 2014/15, 32 368 firms lodged at least one claim on the ETI. “While this is a large number of firms, this represents 15% of firms in the tax database with eligible employees. The ETI was claimed for 134 923 jobs in 2014 and 686 402 jobs in 2015,” Treasury said.
This implies the ETI supported about 5% of all jobs in the tax dataset based on individual employee tax certificates in the 2014/15 tax year.
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