Learnership tax incentive and extension notice

Employers involved, or those who contemplate getting involved in learner, including apprentice, training are commended by the RMI for their continued efforts to address skills shortages in South Africa.  The RMI acknowledges the South African Government’s current drive to train 1 million learners by 2030, as well as the national target of 30 000 artisans per year. 

The government has further created a favourable dispensation for employers to enroll learners, including apprentices, and benefit from available grants, rebates, and incentives.  In this web letter article the learnership tax incentive, and specifically the two pertinent matters receive attention, namely:  (1) definition of ‘learner’ and other important clarifications for employers covered in the SARS interpretation note dated 28 July 2021 and (2) the extension stated in the National Treasury Explanatory Memorandum on the Taxation Laws Amendment Bill, 2021 dated 25 January 2022 are addressed.    

  1. SARS interpretation note – date 28 July 2021

The definition of “learner” in section 12H refers to a “learner” as defined in the

Skills Development Act. Section 1 of the Skills Development Act defines a “learner” as including an apprentice.

The SARS Interpretation Note 20 (Issue 8) dated 28 July 2021 is in terms of the Income Tax Act 58 of 1962.  The relevant section is Section 12h and the subject is Additional Deduction for Learnership Agreements. 

Employers’ attention is drawn to the contents section which covers among others the following:

  • The law and application
  • Registered learnership agreement
  • Requirements for the deduction of the annual – and completion allowances
  • Enhanced allowances – learners with disabilities
  • Prohibition of learner allowances
  • The quantum of annual – and completion allowances
  • Substitution of employers and termination of learnership agreements
  • Reporting requirements and case studies

Employers are encouraged to click on the link below to view the interpretation note.

  1. Learnership tax incentive extension

The National Treasury Explanatory Memorandum on the Taxation Laws Amendment Bill, 2021 dated 25 January 2022 refers.  An extension, another 2 years, effective 1 April this year 2022 to expire 31 March 2024 is provided for.

Employers are encouraged to click on the link below to view the National Treasury Explanatory Memorandum.