Companies not accounting for skills levy

Read time 3min 30sec

The cut in the amount of cash companies recoup for training has its roots in the fact that employers are not fully accounting for the amount they have been getting back, says the Media, Information and Communication Technologies Sector Education and Training Authority (MICT SETA).

In April, the amount companies could claim back from training dropped from 50% to 20% of the levy. The difference of 30% is now accessible through the so-called discretionary grant. However, training through vendors such as Microsoft and Cisco cannot be claimed back under this category, says the industry.

This discretionary amount, which is held back by Sector Educational Training Authorities (SETAs), is going into public Further Education and Training courses, which the sector says are irrelevant as they are the equivalent of a matric.

The IT Association (ITA) is fighting the change in regulations, as it is seen as an anti-incentive in getting companies to fund skills training programmes at work and will widen the skills gap.

Addressing the need

However, MICT SETA CEO Oupa Mopaki says the reason behind the cut is that employers have not fully accounted for the 50%, which they have been getting back since 2000. He says this is shown through the workplace skills plans and annual training reports received over the years.

When companies pay skills development levies and submit an annual workplace skills plan and training report, they qualify for a refund of money paid towards skills development levies. Until April, they could claim back 50%, and can now only recoup 20%. The levy is a percent of payroll.

Mopaki says it is believed that when SETAs keep a larger amount of the levies, skills shortages will be addressed in partnership with companies by implementing one-year National Qualifications Framework (NQF)-based programmes, and registered and implemented vendor-specific programmes.


There is a "misconception" from "certain quarters of our sector" that the MICT SETA does not fund these programmes, says Mopaki. "The MICT SETA has evidence that this is not the case."

Skip Franzen, chairman of the ITA committee on sector skills, has said the 30% that is held back, which is accessible through a discretionary grant, excludes vendor training, which is a huge portion of training spend.

Mopaki notes the SETA has "always recognised" the importance of vendor-specific programmes. It has engaged with some of the vendors to have their certification mapped to existing NQF registered programmes and has signed memorandums of understanding with companies such as Microsoft, he adds.

Although the industry has seen a drop-off in training as a result of the cut, Mopaki says the decrease in the refundable levy will "actually increase the participation of companies, in that quality training will be provided in partnership with employers".

Large gap

Mopaki says there is high demand for skills, especially in the MICT space, regardless of employers getting back 50% of their levies over the years.

The SETA's skills development plan for 2013, notes that, in the IT subsector, another 493 software developers and 451 developer programmers will be needed between 2012 and 2015. Some 402 computer network and systems engineers are required, as are 351 ICT systems analysts.

In the telecommunications subsector, in the same timeframe, 16 ICT business development managers are needed.

Mopaki says the change in grant regulations allows companies that are serious about training to do more training.

"The regulations will ensure that skills development money is used for skills development and will put the SETA monitoring into sharp focus. This will go a long way in narrowing the critical- and scarce-skills gap in our sector and the country."

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