Skills development in this country is informed by this brief history.Are corporate organisations taking this forward without interpreting the levies as just another form of taxation? The incentive for corporate participation should be the fact that these skills are developed so that our industries are able to compete and produce equal or superior products and services to those from other countries.
There are other related incentives such as the tax relief offered by the state to motivate participation in skills development.Let’s look at this incentive closely: In the Government Gazette No 23709 No 1047 of 5 August 2002, the Presidency amended the Taxation Law Amendment Act, No. 30 of 2002 to insert the following:
•That an employer who has during the year of assessment entered into a registered learnership agreement with a learner in the course of any trade carried on by that employer; or
•a learner during the year of assessment completed any registered learnership agreement entered into by that employer with that learner during that year or any previous year of assessment in the course of any trade carried on by that employer and
•shall be allowed to deduct from their income the allowance outlined below:
Furthermore, in his budget speech outlining budget tax proposals for 2006/7, Mr Trevor Manuel, Minister of Finance, announced that the learnership tax allowance which was set to expire in October 2006, has now been extended for a further five years to 2011.The allowance has been increased in support of the National Skills Development Strategy (NSDS) as outlined in the table below:
In respect of a learner who was employed by that employer when the learnership agreement was signed an amount equal to the lesser of 70% of the annual equivalent of the remuneration of the learner stipulated in the agreement of employment or R20,000; or In respect of a learner who was not employed by that employer when the learnership agreement was signed, an amount equal to the lesser of 70% of the annual equivalent of the remuneration of the learner stipulated in the agreement of employment or R30,000; or In respect of a learner who has completed any registered learnership agreement an amount equal to the lesser of 70% of the annual equivalent of the remuneration of the learner stipulated in the agreement of employment or R30,000.
There are, however, conditions that apply to the above.The employer needs to provide the following to the Commissioner of Revenue:
•The name of the SETA with which the learnership agreement is registered;
•the title and code of the learnership allocated and issued by the Department of Labour;
•the full names and identification number of the learner; and
•proof that the employer has complied with all the requirements of the Skills Development Levies Act, 1999.
In future editions we will look at tax relief for people with disabilities and tax allowances relating to bursaries and scholarships.
Source: By Rufus Ledwaba (TaxTALK)