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EmployersÔÇÖ levy outlook gloomy- NTA

Fri, 11 August 2017 19:38
News Flash

Namibia Training Authority (NTA) has raised red flags over a possible catastrophic decline in the employers’ levy as companies are either closing down or running bankrupt under the current crippling economic conditions.

 Under government Notice No.5 of 2014, all Namibian registered employers with an annual payroll of N$1 million or more are required to register and pay one percent of the value of their actual annual salary as a Vocational Education and Training (VET) levy to the NTA’s National Training Fund on a monthly basis. However, as the economy registered its deepest contraction in the 2016/2017 financial year after the government’s fiscal consolidation plan, NTA is finding it hard to collect sufficient funds.

“We anticipate a reduction in the VET Levy receipts. This is of concern as there are some key projects the NTA is planning to implement,” NTA general manager for national training fund Joseph Mukendwa said.

Mukendwa had earlier indicated in the first quarter that collections had been well on course having announced an approximated total of N$266 million in the 2014/2015 financial year. Between 2015 and 2016, the collections saw a stunning improvement by N$14 million, a significant increase which threw NTA in an optimistic mode. However, a 33% budget reduction for the 2017/18 financial year will likely mean trouble for the TVET sector already mired in a pool of problems.

“Our allocation from the Ministry for the 2017/18 fiscal year has been reduced by 33%. This is a significant reduction. This may mean that we have to decrease the number of trainees that can be supported by the state allocation,” lamented Mukendwa. He, however, said engagements are ongoing to find solutions to the challenges posed by the reduction in the budget allocation.

 “However, trainees who are currently supported will not be affected,” he indicated. Beginning of this year, Windhoek Vocational Training Centre (WVTC) Principal Paulus Haukongo raised alarm over the effects of the budget cuts saying that he was forced to take only 1 000 students annually as opposed to a target of 6 000.

“We are having the Harambee concept, that nobody should be left out and at WVTC we now have to limit our student intake to just 1000 annually. This is because of the economic hardships we are facing,” he had earlier told The Villager in an exclusive interview.