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21 April 2021

The Minister of Higher Education, Technology and Innovation, Hon. Dr. Itah Kandjii-Murangi, in the Government Gazette of 1 April 2021 (Edition No. 7498), announced amendments to the regulations governing the administration of the Vocational Education and Training (VET) Levy programme. The General Manager: National Training Fund, Virginia Kaimu sheds more light on the amendments.

Q1: First of all, what was the rationale behind all the amendments?

 

VK: No set of regulations is ever perfect, making the ongoing reform of provisions contained thereunder, a perpetual process. The administration of the VET levy has not been any different. Over the years, we have identified a number of provisions which hampered the effective administration of the programme and we set out to recalibrate these provisions.

So, in brief, the rationale behind this action has been the streamlining of administration and related processes towards enhanced efficiency and transparency of the VET Levy programme.

 

Q2: Notice 66 pertains to changes in the definition of ‘training’ and the administration of Employer Training Grant claims. What are the implications of these amendments for employers?

 

VK: Before  the amendments, ‘training’ was defined as vocational related training provided by a state-owned vocational training centre or a private vocational training provider accredited by the Namibia Qualifications Authority. Training  was? limited to NQF Level 5. With the amendments coming into force, this definition has been expanded to also now include certificates and diplomas up to NQF Level 6.

 

Q3: In turn, Notice  67?deals with the issues of levy payment date and the definition of ‘remuneration’? Can you enlighten employers on these changes and the implications thereof?

 

VK: The date on which the VET Levy is to be paid has been open to differing? interpretations. As per the old Regulations, the Levy must be paid monthly in arrears, on or before the 20th day of the following month. From the NTA’s perspective, paid means funds appear in the NTF’s account on or before the 20th; whereas some employers have argued that the day they processed the payment is to be considered the date of payment. The amendments now make it clear that levies must be paid and reflect in the NTF Account on/ before the 20th of each month.

The definition of ‘remuneration’ also posed a similar challenge. In the old Regulations, ‘remuneration’ was defined as total value of all payments in money, or in kind, made or owing to an employee arising from the employment of that employee. This  was aligned to the Labour Act. As per the amendments, the definition of ‘remuneration’ is now aligned to the Income Tax Act, for consistency.

 

Q4: Another issue captured in Notice  67? is the aspect of submission of payroll evidence and related penalties?

 

VK: Many employers have been omitting monthly payroll declarations, contrary to regulatory provisions. The latter directed VET Levy claims to be accompanied by a monthly return, declaring the monthly payroll.  This has resulted in the NTA being unable to verify the collectables due, whereas the completeness of revenue could also not be confirmed in the absence of supporting evidence.

The amended Regulations now provide for the imposition of a N$250 penalty on every late monthly submission/ declaration and make it compulsory for employers to submit payroll evidence with monthly declarations.

Q5?The amendments also result in changes as far as the administration of Levy payments are concerned, of which one is the introduction of a cut-off period for the amendment of declarations. Can you elaborate on these changes?

 

VK: As far as the cut-off period for the amendment of declarations is concerned, one has to consider that under the old Regulations, employers could amend declarations, dating back to 2014, and this had a changing effect on closed balances of prior financial years.

In overcoming this challenge, a cut-off date for amendments of monthly declarations has been introduced, whereas a six-month grace period, from date of gazetting, will be granted for employers who want to amend declarations from prior years. Thereafter, amendments will only be allowed within the ‘current’ financial year. Considering that the NTA financial year commences on 1st April and ends on 31st March, an amendment to the declaration of March, will only be allowed until 30th April of the following financial year.

Q6?An amendment as far as the ETG claim process is concerned, is the introduction of a cut-off period for evidence linked to ETG claims. Tell us more about this change.

VK: Under the old Regulations, there was no lapsing period for the re-submission of evidence, in support of ETG claims. The Regulations stipulated that the NTA shall either approve, or reject applications for the ETG. If the NTA rejects an application, the employer concerned may re-submit the application, if the employer complies with eligibility criteria. This has resulted in long outstanding claims with a liability in NTA’s books that cannot be utilised for key priority training initiatives and projects.

The amendments now introduce a six-month cut-off period for re-submission of ETG applications/ evidence that will commence from date of claim rejection by NTA, i.e., ETG claims will lapse within six months from the date on which a specific employer’s application for re-imbursement has been formally rejected by NTA. The NTA will inform an employer in writing and highlight the reasons for rejection. The employer will forfeit funds if the revised claims and/or evidence are not submitted within this six-month window. Funds so forfeited will then be swept to the Key Priority Grants Funding Window, in accordance with the Regulations.

 

Q7: What value do you expect the amendments to add to the work of the National Training Fund Department?

 

VK: The changes we have introduced are informed by the considerable insight gained over years of implementation, since the VET Levy programme’s inception. The NTF Department anticipates these changes to add significant value in ridding ourselves, and indeed our valued employers, from bottlenecks which hamper the effective and efficient administration of the programme.

We encourage our VET Levy-paying employers to acquaint themselves with these amendments, which have the streamlining of administration and related processes and enhanced efficiency and transparency, as overarching objectives. We also wish to acknowledge the important input of our National Training Fund Council and our esteemed industry and employer body stakeholders throughout the consultative process. We trust that these amendments will better position the VET Levy programme in living up to its value proposition as a ‘partnership with employers’.

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