South Africa To Give Tax Breaks To Create Jobs

by Lorys Charalambous, Tax-News.com, Cyprus

14 February 2011

In his State of the Nation Address, South African President Jacob Zuma established the reduction of unemployment and creation of jobs as one of the government’s highest priorities, and promised a jobs fund and tax breaks.

He exhorted all parts of the public and private sectors to focus on tackling the level of unemployment, which is reported to be around 24%. He said that the government, on its part, would establish a fund of ZAR9bn (USD1.23bn) to finance job-creating initiatives over the next three years, while there would also be ZAR20bn in new tax allowances or credits to promote those investments in manufacturing industries that would increase employment.

In addition, he announced that the Industrial Development Corporation would allocate a total of ZAR10bn over the next five years for investing in labour-intensive projects. There would also be help for small businesses, largely by a reduction in onerous regulations.

Zuma himself gave few details of the proposed measures. They are expected to be provided by the Finance Minister Pravin Gordhan when he unveils his budget on February 23.

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