Abuse of the Employment Tax Incentive Scheme

Abuse of the Employment Tax Incentive Scheme

BEE, Human Resources, Skills Development, Tax

In conjunction with SAICA, the South African Institute of Tax (SAIT) urges its members to be cautious of structures created to take advantage of the Employment Tax Incentive (ETI) Scheme where the nature of the relationship between the employer and employee is not a real one.

The article and further detail can be found at this link.

The article draw attention to one structure which roundtrips cash to enable a party to take advantage of ETI and also claim skills development points for BEE.

These structures have now come to the attention of Treasury so please beware as these “ghost employee” structures will be investigated. Ultimately it will be the employer who feels the pain rather than any advisor who facilitates it.

Abuse of the incentive will also likely lead to its closure which will impact those employers who do need it to support employment. It will also discourage government from introducing similar incentives.