The South African Revenue Service (SARS) has flagged the country’s high youth unemployment rate as a potential future problem for the country’s taxes.<\/p>\n
The concerns are highlighted in the revenue collector’s annual performance plan for 2021\/2022, which details some of the key issues facing the group and how it plans to address them.<\/p>\n
“South Africa is a country of young people, as recent statistics released by Stats SA indicate. The same is true for our current individual tax base,” it said.<\/p>\n
“The high, and growing, unemployment amongst the youth is a serious threat to the tax base and the overall integrity of the tax system. It has become a serious constraint to revenue growth and will cause further strain on government to increase spending on social benefits.”<\/p>\n
Statistic South Africa’s latest unemployment numbers for the fourth quarter of 2020, showed that South Africa\u2019s unemployment rate hit its highest point in 12 years at 32.5%.<\/p>\n
In the fourth quarter of 2020, the official unemployment rate for young people (aged 15\u201324 years) was 63.2%, a 1.9% increase from 61.3% in the third quarter of 2020, AfricaCheck<\/a> <\/strong>reported.<\/p>\n Youth continue to be hit\u00a0<\/strong><\/p>\n Data published by the National Income Dynamics Coronavirus Rapid Mobile Survey (NIDS-CRAM) on Wednesday (12 May), shows that the country’s move to introduce harsher lockdown restrictions at the start of 2021 also impacted churn in the job market.<\/p>\n The NIDS-CRAM is a study conducted by a national consortium of 30 social science researchers from local universities, as well as groups like the Human Sciences Research Council and the Department of Education.<\/p>\n Between October 2020 and January 2021 there was still significant churning in the labour market with about\u00a0one-fifth of those employed in October not employed in January<\/strong>, and about a fifth of those not employed in October finding work in January.<\/p>\n Rates of job finding among the non-employed were similar across age groups, while job loss was strongly and negatively correlated with age.<\/p>\n Comparing outcomes for youth (18-24), prime-age adults (25-40) and middle-aged adults (41-55) it is clear that the youth were most affected by job losses.<\/p>\n Job loss for the youth was more than double (-31%) job losses for middle-aged adults (-13%) and also much higher than for prime-age adults (-19%).<\/p>\n
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