Cape Town - Employment and Labour Minister Thulas Nxesi on Tuesday confirmed that discussions were under way with the South African Revenue Service (Sars) about the prospect of using the country’s tax infrastructure to support the Unemployment Insurance Fund (UIF) to implement the Temporary Employee/Employer Relief Scheme (Ters).
“We have processed applications of close to R1 billion and, as we speak now, we are of the view that the UIF is managing, but Sars is waiting on the sidelines in case our system crashes,” said Nxesi in an interview broadcast on Radio 702.
Nxesi spoke as members of the recently formed Covid-19 Economists Group said they were anxious about the capacity of the UIF to implement Ters.
In a paper published on the network’s website and written by Miriam Altman, the group made a call for a non-discretionary payment to be made automatically to all Sars-registered firms, covering a portion of workers’ wages using the tax system.
Altman said: “The scale of the benefit could still be calculated along the lines of the Ters benefit and the funds could come from the reserves accumulated by the UIF.”
The DA’s spokesperson for employment and labour Michael Cardo said: “Given the backlogs, administrative paralysis and bureaucratic imbroglio at the UIF, the involvement of Sars is necessary and urgent.”
In a statement, the labour department said: “As of Tuesday, the UIF had received just over 55 268 applications from employers representing about 1 601 767 employees. In total, the UIF has over 1 800 000 employers registered on its database representing more than 8 million workers.”
“Of the received applications, the UIF has processed 37 673 employer applications which means that 606 462 employees will receive their benefit. About 9 938 applications couldn’t be processed due to errors and the affected companies have been notified to correct their applications and resubmit them,” the statement said.