The Skills Levy is a compulsory company contribution to the skills development of the country. The skills have been grouped by economic sector. The Skills Development Act encourages employers [dentists] to use their workplace as learning and training environments.

It remains for dentists to decide if the Rand value of their levy payments is great enough to warrant further interest in the use to which this levy will be put. Dentists are therefore encouraged to utilise opportunities presented for training and development of their employees' skills.

1 June 2000 was the deadline for companies to produce the workplace skills plans. This date has been extended to end September 2000 as most did not register and the SETAs were not ready to proceed.

Registration

All dentists should be registered with SARS irrespective of whether they are exempted or not for payment of levies. Registration is compulsory for all employers.

Who must pay the skills levy?

There are still members of SADA who believe they do not have to register and pay the required levy because their total payroll does not exceed R250 000,00 per annum. As stated above registration is compulsory for all employers whether they are exempted or not.

There are two aspects to the exemption based on annual payroll limit, namely that the total leviable amount does not exceed R250 000,00 and he or she is not required to apply as registration as an employer in terms of the Income Tax Act. It is doubtful whether dentists would qualify on the second basis of the exemption and therefore liable to pay the levy.

Amount of Levy payable

In the year 2000, 0.5% of the leviable amount [total remuneration] is due and from April 2001, 1% will become payable by dentists.

What happens to the levy once paid to SARS?

SARS is responsible for the collection of the levies. 20% goes to National Skills Fund and 80% goes to the relevant SETA. The SETA will use maximum of 20% on administration, 10% on exceptional costs and 50% on grants to employers.

What's in it for employees of dentists?

All employees of dentists should benefit from the new emphasis on training and development, as it will create opportunities for them to gain new skills, which could be more effectively utilised by dentists.

What is a SETA?

The words "SETA" stands for "Sector Education and Training Authority" as explained below.

There are at present 27 SETAs' registered representing every sector of the economy in South Africa. A SETA is responsible for monitoring the quality of skills and training provided for its particular sector.

By now, it is assumed dentists have to selected the SETA, which closely identifies with its core business and to whom the levies must be paid.

The Health and Welfare SETA [HWSETA] most closely identifies with dentistry. It is also the chosen SETA of the Association for payment of its levies. Its constitution provides under the Sub-Sector of Medical and dental activities and services amongst others for: -
· Public service dentists;
· Private sector dentists;
· Oral hygienists: public & private;
· Dental therapists: public & private
· Dental laboratories [dental technologists and technicians]

The Association has been approached by HWSETA to serve on one of its profession specific committees and SADA has expressed its willingness in doing so.

Procedures for Recovery of Levies Paid by Dentists

Training their staff is the only way in which up to 50% of the levies paid by dentists can get some of their money back.

The government is relying on the premises that, if companies are going to be paying money anyway, they will try to get some of this money back by training their employees.

Members are strongly urged to register and apply for the various grants and apply for learnership agreements when they become available. It may become very useful for training of staff at various levels in a dental practice.

In the first year i.e. 1 April 2000 to 31 March 2000, dentists will be able to claim up to a maximum of 50% of the levy paid from the relevant SETA with whom they have registered.

Grant "A" - 15%

Dentists may recover 15% of the levy paid by them on appointment of a Skills Development Facilitator who is registered with a particular SETA.

Who is a Skills Development Facilitator?

The SDF can be: -

-a worker in the employment of the dentist; or
- a formally contracted external person; or
- a person jointly appointed or employed by a number of dentists to assess the skills development needs of the group of dentists and their employees. Dentists will be entitled to jointly appoint a SDF to handle all skills development activities.

When must the SDF be registered with the relevant SETA?

The initial registration date for registration by SDF with the relevant SETA was 15 May 2000. This date has been extended to 30 September 2000.

The HWSETA is determining the criteria for registration of SDFs', all dentists who have selected HWSETA will receive their application forms from that SETA.

Functions of SDF

The SDF will be expected to perform the following functions: -

* assist the dentists and staff with the development of a workplace skills plan;
* submit the workplace skills plan with the relevant SETA;
* advise the dentist on the implementation of the plan;
* assist the dentist in drafting the annual training report against approved workplace skills plan;
* serve as a contact person between the employer and the relevant SETA.

Grant "B" - 10%

1. A dentist approved for Grant "A" above can recover a further 10% of the total levy paid by submitting a Workplace Skills Plan. The SDF appointed above will be responsible for this function with the relevant SETA.
2. Annexure B of the regulations contains guidelines on how to compile an annual training report based on the approved workplace skills plan.

Grant "C" - 20%

1. A dentist approved for Grant "A" and Grant "B" will be able to recover a further 20% of the total levy payment by preparing and submitting an annual training report based on the approved workplace skills plan.
2. The dentist seeking payment must submit an acceptable report with training records etc.
3. Annexure "C" of the regulations contains guidelines on who to compile an annual training report.

Grant "D" - 5%

1. Each SETA will make available a further 5% of the total levy payment as a Grant "D". This will be for specific skills shortages in its sector.
2. The grants may be paid as a percentage of the total levy or fixed price in Rands for training conducted.
3. Each SETA will recommend a list of skills shortages that merit grants.

What will happen to the levy paid by dentists if they fail to comply with the conditions set for grant recovery?

Dentists will forfeit the grants.

General

The SETA that the dentist has selected is in the best position to provide the necessary forms and more information on what is required of employers.

It must be borne in mind that levies paid by dentists like other employers are allowed as a tax deduction in terms of s 11 [a] of the Income Tax Act.

However this Association strongly encourages members to utilise the recovery of grants procedures to develop their employees skills.

* P Govan
SADA's Legal Counsel