Tax incentives that support job creation in South Africa - a comparative study amongst BRICS

Abstract

South Africa’s unemployment rate is amongst the highest in the world. It accounts for approximately two percent of global unemployment. The South African government has recognised the importance of job creation and expressed its willingness to help create more jobs. A comprehensive set of policies is necessary to expand long-term job growth in South Africa. Thus, the government should identify and implement new and effective policies that will help create more jobs. In this study, the tax incentives available to support job creation in Brazil, Russia, India and China and South Africa (BRICS), are researched. The purpose of this study is to perform a comparison of the tax incentives available to support job creation in South Africa with the tax incentives available to support job creation in the BRIC countries. The first objective of the comparison was to evaluate whether the tax incentives that are available to support job creation in South Africa are on par with those available to support job creation in the BRIC countries. The second objective of the comparative study was to identify tax incentives that are available in BRIC countries for job creation that are not available in South Africa so that the government may consider whether these incentives are feasible in South Africa. It was found that the tax incentives that support job creation in South Africa are in some instances on par with, and in some instances even exceed, the tax incentives that are available to support job creation in the BRIC countries. AFRIKAANS : Suid-Afrika’s werkloosheidskoers is van die hoogste in die wêreld. Dit verteenwoordig ongeveer twee persent van wêreldwye werkloosheid. Die Suid-Afrikaanse regering het die belangrikheid van werkskepping erken, en sy gewilligheid om meer werkgeleenthede te skep, bevestig. ‘n Omvattende beleidsraamwerk is nodig om die langtermyn groei in werksgeleenthede in Suid-Afrika te bevorder. Die regering behoort derhalwe nuwe en effektiewe programme om werkskepping te bevorder, te identifiseer en te implementeer. In hierdie studie word die belastingaansporings wat werkskepping in Brasilië, Rusland,Indië, China en Suid-Afrika (BRICS) bevorder, nagevors. Die doel van hierdie studie is om ‘n vergelyking te doen van die belastingaansporings wat beskikbaar is om werkskepping in Suid-Afrika te ondersteun, met die belastingaansporings om werkskepping te bevorder in die BRIC lande. Die eerste oogmerk met die vergelyking was om te evalueer of die belastingaansporings wat beskikbaar is om werkskepping in Suid-Afrika te ondersteun vergelykbaar is met wat beskikbaar is om werkskepping in die BRIC lande te bevorder. Die tweede oogmerk van die vergelykende studie om belastingaansporings wat in die BRIC lande beskikbaar is om werkskepping te bevorder, wat nie in Suid-Afrika beskikbaar is nie, te identifiseer sodat die regering kan oorweeg of hierdie aansporings haalbaar is in Suid-Afrika. Daar is bevind dat die belastingaansporings wat beskikbaar is om werkskepping in Suid- Afrika te ondersteun, in sommige gevalle vergelykbaar, en in ander gevalle selfs beter is, as die belastingaansporings wat in die BRIC lande beskikbaar is om werkskepping te bevorder.