The employment tax incentive (ETI) was meant to boost jobs, but it’s quietly slipping into irrelevance owing to stagnant wage thresholds — turning a once powerful tool into a nightmare.
ETI was introduced in 2013 as a policy mechanism to encourage the employment of young and low-income individuals by providing tax relief to those who employ them. However, an investigation of the ETI monthly remuneration bands shows they have been stagnant since inception, rendering them useless.
The national minimum wage and inflationary pressures have risen, but no proportional adjustments to the ETI bands have been made. The stagnation undermines the purpose of the incentive. Workers whose employers once qualified for ETI are now disqualified due to natural wage progression. The lower bands of the ETI have become virtually obsolete. If this issue remains unaddressed, the ETI will cease to serve its intended purpose.