Home Page Contact Us Customer Support Subscribe to Workinfo.com for R820.80 pa Caselaw - Searchable Labour Court Judgements & CCMA Awards Visit our Legal and Human Resources Bookshop Consulting Services provided by Workinfo.com Copyright, Disclaimer and Legal Notices                          Free bi-monthly newsletter containing important announcements, human resource guidelines and caselaw summaries. Click here to join today.

Government Gazette

Vol. , No. 20552, 15 October 1999

Regulation Gazette, No. 6649

No. R. 1230

GOVERNMENT NOTICE

DEPARTMENT OF LABOUR

SKILLS DEVELOPMENT LEVIES ACT, 1999 (ACT No. 9 of 1999)

PROPOSED REGULATIONS ON THE SKILLS DEVELOPMENT LEVIES AND RELATED ISSUES IN THE SKILLS DEVELOPMENT LEVIES ACT, 1999

I, Membathisi Mphumzi Shepherd Mdladlana, Minister of Labour, after consultation with the Minister of Finance and the National Skills Authority (NSA), hereby publish for public comment the proposed regulations on the skills development levies and related issues in the Schedule.

Interested parties are invited to submit written comments on the proposed regulations before 15 November 1999 by -

  1. posting comments to -

The Project Manager of Project 6
Messrs. J du Preez / F Strydom
C/o Department of Labour
Private Bag X 117
Pretoria
0001

  1. fax to - (012) 309 4048

  2. delivering comments to -

Room 329A(M) or 329B(M) or 327(M)
Third Floor
Laboria House Building
Cur Schoeman and Paul Kruger Streets
PRETORIA

  1. e-mail to Isobel@labourhq.pwv.gov.za   or Strydom@labourhq.pwv.gov.za


MMS MDLADLANA
MINISTER OF LABOUR

SCHEDULE

Definitions

  1. In these draft regulations any word or expression to which a meaning has been assigned in the Skills Development Levies Act, 1999 (Act No. 9 of 1999) shall have such a meaning, unless the context otherwise indicates -

"Act" means the Skills Development Levies Act, 1999 (Act No. 9 of 1999);

"NSA" means the National Skills Authority established by section 4 of the Skills Development Act, 1998;

"SARS" means the South African Revenue Service, established by the South African Revenue Service Act, 1997 (Act No. 34 of 1997);

Employer registration and payment of levies

  1. (1) The procedures and documentation to be completed for registration by an employer for purposes of paying the levy, as well as the procedures to follow on the payment of the levy will be contained in document/s drafted and published by SARS for general knowledge and use.

(2) In a case where a SETA has been granted approval to collect the levy from employers of the specific sector the employer must comply with the requirements of section 5(5) of the Act. For the purpose of notifying SARS of its registration with and the payment of the levy to the applicable SETA the relevant statement/s must be completed and submitted to SARS in accordance with the procedures and documentation drafted and published by SARS as referred to in regulation 2(1).

Furthermore, the procedures and documentation to be completed for registration by an employer for purposes of paying the levy to the applicable SETA, as well as the procedures to follow on the payment of the levy will be contained in document/s draped and published by the applicable SETA for general knowledge and use.

(3) At the request of the NSA or a SETA, the Director General may challenge an employer's selection of a SETA if it can be demonstrated that the selection does not comply with the criteria contained in section 5(2) of the Act.

The Director-General must inform the employer in writing that he/she has 14 days (?) to defend the selection, after which the Director-General will make a decision on which SETA the employer must join. Where the employer's selection is changed, the Director-General must inform SARS of this change.

(4) Where an employer's business activities complies with the following criteria:

  1. The levy paid by the company is more that R. . . . million (amount to be defined),
  2. The core business of the company is clearly divided between two or more SETA's, and
  3. The core business activities are demonstrated to make up between 40% and 60% of total business operations,

(5) The company must still select a single SETA to pay its levy to but, based on an agreement between the company and SETA's concerned, the SETA selected to receive the levies may transfer the full amount of the levies to the second SETA, in proportion to the company's business activities falling under the jurisdiction of the second SETA.

At a workshop of representatives of stakeholders during September 1999 it was agreed that the Department of Labour / NSA must have some power to contest an employer's selection of a SETA, on registration with SARS, where the employers core business clearly does not fall into the scope of that SETA. However, this should not be applied to "Grey-areas", where a company clearly falls between two or more SETA's.

A second problem arises where a large company's business is more or less equally split between two or more SETA's. In these instances the company will face real problems in accessing the services and influencing the policies and direction of the other SETA, while the over SETA's will experience large revenue losses. The result is likely to be large and complex inter-service and funding arrangements between these SETA's. It was therefore proposed that in exceptional cases, defined in terms of quantum of levy and proportional division of business between two SETA's, the SETA the company selects to pay its levy to should be allowed to transfer the appropriate proportion of funds to the second SETA, by agreement between the SETA's and company.

Criteria when SETA request to collect levies for the sector

  1. (1) If it is the intention of a SETA to apply to the Department to collect the levies from the employers of the specific sector as provided in section 7 of the Act the following requirements will be applicable -
  1. The SETA must submit a fully motivated request to the Director-General.
  2. The request of a SETA will be evaluated against the requirements stipulated in the Act, in consultation with the Minister of Finance.
  3. If such request is approved a notice to that effect must be published in the Gazette to inform all employers that fall within the jurisdiction of such specified SETA to pay the levy to that SETA.

(2) The criteria to be used to consider a request from a SETA as indicated in regulation 3(1)(b) are inter alia the following -]

  1. Sufficient grounds exist for a SETA to collect the levy from the employers in its jurisdiction - section 7(2)(a) of the SD-Levies Act, 1999;
  2. The SETA must submit motivation why the levies cannot be based on payroll and why the rate and basis must differ from the provisions of section 3(1) to (4) of the Act;
  3. The SETA must demonstrate the required competence, financial and organisational ability on a national basis to collect the levy - section 7(2)(b) of the SD-Levies Act, 1999;
  4. The SETA must demonstrate the required competence, financial and organisational ability to comply with the applicable requirements of the Public Finance Management Act, 1999 (Act No. 1 of 1999);
  5. The SETA must demonstrate that it has the capacity to inter alia perform the undermentioned functions other than the collection of the levies and its other functions in accordance with the Act and the Skills Development Act, 1998, namely -

  1. The calculation and collection of interest on late levy payments by employers -section 11 of the SD-Levies Act, 1999;

  2. The calculation and collection of penalties on default - section 12 of the SD-Levies Act, 1999;

  3. Recovery of levies from employers - section 14 of the SD-Levies Act, 1999;

  4. Appointment and employment of inspectors at the cost of the SETA - section 15(2) of the SD-Levies Act, 1999;

  5. The capacity to institute legal proceedings concerning a contravention of the SD-Levies Act, 1999 and the applicable provisions of the Income Tax Act, 1962 (Act No. 58 of 1962), in so far it relates to the collection of levies by a SETA at its own costs;

  6. The capacity and infrastructure to pay the 20% of the levies collected by that SETA, and any interest and penalties collected in respect thereof, to the National Skills Fund not later than the 15th day of each month - section 9 of the SD-Levies Act, 1999;

  7. The SETA must be in a position and have the necessary information system/s to submit any information to SARS and to the Department, as required, regarding all the employers who pay the levies directly to the SETA.

  1. The SETA column that the costs pertaining to the requirements stipulated in regulation 3(2)(e) will not exceed 2% of the total amount of levies collected - section 7(2)(c) of the SD-Levies Act, 1999.

Levies payable - different rate & base (Year 1) - section 3(6) & (7)

  1. (Because of the sensitivity of this matter a legal opinion must still be obtained)

Submission of Sector Skills Plan by SETA

  1. (1) For the purpose of section 8(3)(b) of the Act the business plan to be submitted by a SETA with its application for establishment will be regarded as sufficient until the 31 July 2000 to allow the Director-General to initiate the transfer of the levy and related monies to a SETA.

(2) The submission of a sector skills plan by a SETA will with effect from 31 July 2000 be a requirement to initiate the further transfer of the levy and related monies to a SETA.