Skills levy increase.

[Dave A]

According to this article in Fin24 there is an increase in the skills development levy being considered.

Personally, before they consider increasing the SDL, why don't they drop the mandatory grant system. For small companies this is a total waste of time. The only beneficiaries are big companies and they are being rewarded handsomely for filling out the paperwork. How does this contribute to training?

The system is one of the most over-engineered, wasteful efforts I think this government has ever produced.

[Alan]

Hi Dave i was under the impression that SDL was going to be dropped for the small business.

[Dave A]

Well - the limit was raised last year to companies with an annual payroll of R500 000.00 or higher (it was at R250k before).

I just think that they could have done a better job with 1% of the country's payroll - the inefficiencies are horrific.

Of the leviable amount:
45% goes back to a company doing the paperwork (only worthwhile for big corporates).
2% goes to SARS
10% goes to admin costs
20% goes to the National Skills Fund
leaving about 25% going to SETA funded training.

I know it looks like the maths does not add up, but with smaller companies not claiming their mandatory grant, this adds to the pool available for funded training.

My point is that if they drop the mandatory grant, a big pool of money becomes available for funded training and the admin load actually drops.