SA needs education tax incentives

Johannesburg - According to Graham Earle, tax director at BDO Spencer Steward, the time has come for the government to introduce creative ways of incentivising companies and individuals to sponsor the further education of their employees.

And more importantly, they say, this will encourage companies and individuals to take responsibility for their employees' children, providing them with the opportunity to study at educational institutions that have a track record of achieving a 90-100% pass rate and produce scholars armed with university exemptions.

"The job of educating our nation cannot rest with government alone," he says.

"The Minister of Education has admitted the government faces huge challenges in raising the standard of many of our schools. This will require time. However right now there are many South Africans - corporate and individuals - who are committed to improving our future skills base.

These people are ready and willing to invest in enhancing the education of their employees and their children. However often they are hampered due to current tax laws.

"While companies receive a small benefit if they educate their employees or relatives of such employees, there is no benefit to those willing to invest in certain employees' children who do not qualify in terms of the tax legislation.

And more importantly, there are penalties in the form of additional taxation for those found investing in helping their employees to uplift the lives of their children through grants or donations," says Earle.

"It is untenable and could so easily be addressed," says Earle. "I strongly believe the time has come for our Minister of Finance, Trevor Manuel, to tackle the issue head on in his upcoming budget speech. I hope to see more incentives given to corporations and individuals to encourage them to sponsor much-needed education."

- I-Net Bridge