Brokers profit from youth tax incentive
JSE-listed labour broker Workforce Holdings got substantial assistance from the Employment Tax Incentive (ETI), otherwise known as the youth wage subsidy.
Like its larger peer Adcorp, Workforce is pocketing the ETI instead of passing it on to clients – who are supposed to be given an incentive by the tax break to hire more young people.
City Press recently reported that Adcorp had claimed R7 million in ETI by the incentive’s second month in February, according to its annual report this year.
Workforce said in its report to shareholders that the ETI had had a “substantial” effect on its results.
The company’s major division, staffing and recruitment, increased its operating profit in the first half this year by 28% to R63 million compared with the first half of 2013.
Overall, the company’s profit almost doubled to R24 million.
Workforce’s financial director, Willie van Wyk, told City Press this week that the company would not disclose how many people it had on the ETI, how much benefit it was deriving or whether it would be passing the subsidy on to clients.
The group places approximately 25 000 workers at other companies.
“We are thus not at liberty to disclose this information at this stage, both on account of good business practice, as well as JSE rules and regulations,” he said.
This is because the information