WINDHOEK – The Namibia Employers’ Federation (NEF) has in principle welcomed the implementation of the Vocational Education and Training (VET) levy, which was published in the Government Gazette of January 27, 2014.
“We encourage all employers to accept the levy and to see it as a medium to long-term investment in the country as a whole. It should not be seen purely as a cost. We also encourage employers to continue all the training that they have previously been offering their workers,” remarked the secretary general of the NEF, Tim Parkhouse.
Speaking to New Era last week, managing director of Namibia Breweries Limited, Wessie van der Westhuizen, said the VET levy would encourage companies to invest in training because businesses would get back part of their investment to re-invest in further skills training. “We fully support the levy. In the past people were reluctant to invest in skills training because when employees left the company they took that investment with them. This is not the case with the VET levy,” noted Van der Westhuizen.
Parkhouse added that the employers’ organisation is satisfied that the minimum level for companies to be registered has been raised to N$1 million per year and that the contribution rate has been set at 1 percent, although the NEF had urged that the rate be reduced to 0.5 percent. The NEF also welcomes the directive from the Receiver of Revenue that the levy may be claimed as a company expense.
The Namibia Training Authority (NTA) has reminded eligible employers, which include state-owned enterprises and local authorities, to ensure that they avoid penalties or interest by registering for the VET levy before the expiry date of February 27. Under the notice, employers with an annual payroll of N$1 million or more are required to register with the NTA as levy-paying employers.
The NEF, however, has expressed concern about the cash-flow implications for companies which are engaged in training. “Remember that there are some companies already investing heavily in training. They will now have to pay the 1 percent levy upfront and only be able to claim back their 50 percent after one year. This needs to be corrected to become effective after a maximum of four months,” said Parkhouse.
He said the organisation is also concerned about the restrictiveness of the reclaimable expenses, where only Namibia Qualifications Authority (NQA)-registered courses would be allowed. “There are a vast number of short courses being offered, which are all aiding the development of vocational workers in the country. We strongly urge that this can be reviewed once the operation of the levy collection is running,” said Parkhouse.
A survey carried out by the NEF during 2012 indicated that 83 percent of respondents asked for short courses to be allowed for reclaiming. “Generally it is of paramount importance that the NTA is able to re-distribute the funds collected reasonably quickly, while maintaining the required controls, and not allow a massive reserve to build up for whatever reason,” Parkhouse said.
By Edgar Brandt