The Vocational Training Fund TAXATION WORKSHOP 10 November 2010 L. M MPINANG
Presentation overview: • Introduction • Administration of Fund • Payment and Calculation of Levy • Reimbursements • Update on the VTF • Challenges
Introduction Informed by : • 1993 Commission on Education • Revised National Policy on Education (1994) • National Policy on V E & Training (1997) • Vocational Training Act (1998) • Pre-Implementation Seminars (2007/2008) • Vocational Training (reimbursement )Reg No8/08 • Vocational training (levy ) no 9 0f 2008 • Levy Paying – (October 2008)
GOALS • To generate sufficient funds to support skills training by employers= Increased skills base at the workplace • Support the goal of cost-sharing in skills development in Botswana • Helping to bring together supply and demand for training • Create opportunities in the training market
Payment and Calculation of Levy • The amount of levy is based on the annual turnover of any Botswana company that is registered under the VAT Act or is liable for VAT at the following rates: • Annual turnover of P500,000 – P2 billion- levy = 0.2% of turnover • Annual turnover of more than P2 billion, contribution is 0.2% of turnover for the first 2 billion and 0.05% for any amount in excess of the P2 billion.
REIMBURSEMENTS • Company must be up-to-date in paying Levy • Vocational Training that falls within the regulatory requirements (Accredited Institution or workplace) • Only training of citizens is claimable except for special cases where training of non-citizens is approved in advance by BOTA. • Prior approval by BOTA on Technician Training and up to Diploma level may be eligible (TEC approved)
Reimbursement Formula/Limits • There are two grant limits • 1) Limit based on amount of Levy (Formula) • Every P1.00 paid as levy up to a maximumof P1,000.00 shall generate a grant of P5.00 • Every P1.00 paid as levy in excess of P1,000.00 but below P5,000.00 shall generate a grant of P2.50 Every P1.00 paid as levy in excess of P5,000.00 shall generate a grant of P1.25 2) The total training costs incurred The approved reimbursement is the lesser of the two limits.
ReimbursementsFormula/Limits • Example: If turnover =P1,000,000 then Levy paid = P2,000 1) Grant limit based on levy is: P1000*5 +P1000*2.5 = P7,500.00 2a) If training costs are P10,000 Then the approved reimbursement will be P7,500.00 2b) But if training cost incurred is P4500 Then the approved reimbursement will be P4500
Application for Reimbursement • Use the VTF claim form( from BOTA or ww.bota.org.bw) Attach: • Original receipts or certified copies showing payment for tuition, accommodation, meals and stationary; • Certified copy Omang for person(s) trained; • Certified trainee’s transcripts or certificates showing competencies; • Certified copies of attendance register; • Approval letter, if training was outside Botswana
When can I Claim? Window Period Claims must have been lodged with the Authority on or before the 30th of June of each year
EXEMPTIONS • Entities with an annual turn-over of less than P500, 000.00 • Diamond hub • Innovation hub
Allocation to Special Groups At the beginning of each financial year , the Authority shall allocate funds as follows: • 2.5% for special groups • 1%for skills in emergent industries • 5% for small micro and medium enterprises
Challenges • Few claims • Incomplete submissions • Use of non-accredited training providers • Companies not seeking pre-approvals • No training needs analysis done
WAY FORWARD • Intensifying Public Education; • Consultations to explore broadening the scope of VTF • Improving monitoring mechanism of the VTF system to close “gaps”
Contacts Plot 66450, Block 7 Private Bag BO 340 Gaborone Toll free: 0800 600 934 Web: www.bota.org.bw Email: email@example.com
“UP SKILLING BATSWANA” THANK YOU