The proposal by National Treasury and the South African Revenue Service (SARS) that the learnership tax incentive is to be extended from 1 October 2016 for another five years to 31 March 2022 has been welcomed. 

A recent media statement reported that over 32 000 employers claimed the incentive for 686 402 employees in the 2014/15 tax year. The total value of claims between 1 January 2014 and 31 March 2016 was R6.06 billion, substantially exceeding previous projections. Adjustments to the value of the deduction have been proposed. The proposed rebate will be based on the highest level qualification level of the learner when entering into a learnership agreement to improve the targeting of the incentive towards more technical skills.

It is proposed that the value of the deduction is increased to R40 000 (R60 000 for disabled learners) for qualifications up to NQF level 6 and decreased to R20 000 (R50 000 for disabled learners)for qualifications equivalent to NQF level 7 or higher. Once a learnership contract has been entered into, the employer may claim an additional deduction comprising a commencement allowance (deductible upon entering into a learnership contract with an employee) and a completion allowance (deductible at the end of the learnership contract).
In the case of learnerships that exceed 24 months, an allowance is claimed for every completed year. The incentive also caters for learnerships of less than 12 full months where the benefit is calculated pro-rata.

More information can be found on the National Treasury (www.treasury.gov.za) and SARS (www.sars.gov.za) websites.

Gayle Adlam
Bafundise Skills
www.bafundise.co.za