Employment rate drops in January

Feb 11 2013 10:07

Johannesburg - Employment in South Africa fell drastically during January, according to the Adcorp Employment Index released on Monday.

Adcorp's labour market analyst Loane Sharp said in a statement employment fell in January at an annualised rate of 3.2%.

"Job losses occurred across all contract types and in all economic sectors with permanent posts declining the most, by 5.3% or 40 232 (jobs)," he said.

"This figure represents 80% of the employment losses last month."

The wholesale industry fell by 8.8%, or 13 000 jobs while the retail industry fell by 17.4% or 4 000 jobs.

According to the index, South African households failed to declare up to 30% of their incomes to the SA Revenue Service (Sars).

Sharp said South Africans also underreported their incomes in Statistics SA (Stats SA) surveys.

This led to a discrepancy between the estimated number of income tax payers in the surveys and the actual Sars number.

"The take out is that average taxpayer income is R266 641 per annum according to Sars and R193 325 per annum according to Stats SA - an undercount of 28%," he said.

"Without access to additional data from audits of individuals' tax returns, surveys on people's tax evasion behaviour or tax amnesty statistics, it is impossible to know the extent of under-reporting to Sars.

"Given improvements in taxpayer compliance in recent years, it is likely that income tax evasion has declined, but it is difficult to say by how much."

Sharp said Adcorp's index in February last year noted the results of Statistics SA's Quarterly Labour Force Survey that 440 000 small business closures occurred between 2006 and 2011.

"It is highly likely that these businesses continued to operate, but stopped reporting to the authorities and moved into the informal sector where compliance with income tax laws is patchy," he said.

"Some businesses are straddling both the formal and informal sectors, conducting some work in one and some in the other."

Sharp said Adcorp was waiting for Finance Minister Pravin Gordhan's budget speech on February 27.

"If the tax burden for high-income taxpayers goes up, so will the economic incentives to disappear into the informal sector," he said.

"In order to stem the growth of informal economic activity there is no real alternative but to relax labour laws and reduce income taxes."

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