Dissemination Workshop to Bota Stakeholders on VTF

Survey Results

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Presented By: Mr Tshepo E Nkitseng24 November 2011

The Vocational Training Fund (VTF)

• Introduction

• Administration of Fund

• Payment and Calculation of Levy

• Reimbursements

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Presentation Overview

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 ) No8/08• Vocational training (levy ) no 101 0f 2008•Levy payments commenced October 2008

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Introduction

• To generate sufficient funds to support skills training by employers and therefore increase skills base at the workplace

• Support the goal of cost-sharing in skills development in Botswana

• To bring together supply and demand for training

• Create opportunities in the training market

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GOALS

• 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.

– Oil Industry, contribution is a flat 0.05% on turnover relating to petroleum products

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Payment Calculation

• 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 for training sourced outside Botswana

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Reimbursement

• There are two grant limits• 1) Limit based on amount of Levy (Formula)

– Every P1.00 paid as levy up to a maximum of 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.

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Reimbursement Formula/ Limit

• 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

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Reimbursement Formula/ Limit

• Use the VTF claim form( from BOTA or www.bota.org.bw) and attach the following:

• Certified copy Omang for person(s) trained;• Original receipts or certified copies showing payment for

tuition, accommodation, transport, meals and stationary;• Signed spreadsheet showing salary data;• Certified trainee transcripts or certificates showing

competencies;• Certified copies of attendance register;• Pre - Approval letter, if training was outside Botswana

Application for Reimbursement

When can I Claim?

Claims must have been lodged with the Authority on or before the 30th of June of each year

Window Period

• Entities with an Annual Turn-over of less than P500, 000.00;

• Entities exempt from registering for VAT;

• Companies registered with Diamond hub;

• Companies registered with Innovation hub;(Exemption for the last two is for 5 years from date of registration )

EXEMPTIONS

At the beginning of each financial year, BOTA shall allocate funds as follows:

• 2.5% for special groups

• 1% for skills in emergent industries

• 5% for small micro and medium enterprises

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Allocation to Special Groups

Claims as at 30th Sep 2011

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Levy Update Information

• Total number of Levy paying organisations ± 10000 • Cumulative collection as at end of October 2011: P517 Million • Cumulative claims paid as at end October 2011: P 84 Million• Coming from 731 Companies: ≈ 7%

Vocational Training Fund

Survey Results

Presented By Mr Mathews Phiri

Objectives of the study1) To assess the major achievements of the

Fund to date in relation to its stated objectives and intended results:

Assess what has been achieved, the likelihood of future achievements, and the significance/ strategic importance of the achievements.

Opinions on the Fund’s effectiveness based on impressions and interviews with target groups.

Describe any major failures to date

Objectives cont…..2)The level and specific nature of the

companies concerns in relation to the Fund.

3)Additional regulatory arrangements that can be done to promote the usage of the Fund and bring benefit

4)Any other relevant matter that can enhance the development of human capital through the Fund.

Target populationAll companies that were registered with BURS and eligible to contribute, claim or use the Vocational Training Fund by the end of December 2010.

±9000 companies

A self administered questionnaire was used to collect data for the study.

Simple random sampling was used and 600 questionnaires were sent out to levy payers.

353 completed questionnaires were received back.

Analysis Data entry, cleaning and

analysis were done using Statistical Package for Social Sciences (SPSS) and Microsoft Excel

Results

Response by company typeKey: Company Type Frequency

NGOs 5

Parastatal 8

Training Institution 10

Work-based 10

Private 320

Total 353

Awareness of the VTF among companies

Are you knowledgeable about the VTF? Frequency Percent

Yes 242 69

No 111 31

Total 353 100

Effective means of disseminating information on

VTF.How would you prefer us to provide most

communication about the VTF Frequency Percent

Email

186

53.4%

Phone

20

5.7%

Postal Mail

39

11.2%

Face to Face

33

9.5%

BOTA Website

66

19.0%

Other

4

1.1%

Total

348

100.0%

Training by Employer

Does your Organization/Company train its staff?

Frequency

Percent (%)

Yes

297

84

No

56

16

Total

353

100

Reasons for not training staff

Levels of training required by industry:

Certificate Level

Diploma Level

Degree Level

Employers perception on what they like about the VTF

Major Challenges faced by employersReasons for dislikes about the VTF

Employers perception on what they dislike about the VTF Percentage (%)

Procedures and documentation for accessing the Fund too cumbersome 41

Adequate information about the VTF is not provided 21

Does not cover degree/professional courses 17

Delay in payments 9

Fund is irrelevant to the needs this organisation 7

Other 5

Total 100

Major challenges facing the VTF Division

Few claimsIn complete submissions Use of non-accredited training providersCompanies not seeking pre-approvalsNo training needs analysis/plan doneExorbitant Pricing of programmes by VTI’s

when doing training for Levy payers;Limited scope of training;An influx of training providers in Botswana  

Major challenges faced by Companies in their efforts to train

Suggested Improvement to the operations of the VTF

Code Variable 1 More information on the VTF to beneficiaries 2 VTF to cover post certificate training 3 Reimburse trainers directly 4 Time taken to process applications for reimbursement should be reduced 5 Service delivery by VTF officers 6 Other 7 Period for claims should be extended 8 No changes required 9 VTF to be made user friendly 10 VTF to cover courses that are not accredited

Suggestions to the funding scope

Suggestions to provide quality accredited training

Recommendations

BOTA should consider increasing the use of the email and the website to communicate with levy payers.

The Authority should provide adequate information and education about the VTF.

The procedures and documentation guiding the application for reimbursement should be reviewed, with the aim of making them more user-friendly and quicker to applicants.

The scope of the Fund should be reviewed to include other levels of training beyond certificate such as diploma, degree, masters, professional courses (CIMA, ACCA, AAT, MBA etc) and work improvement seminars.

The Fund should be used to support other training related activities such as: • Internships, attachments and on the job-

training• Conducting training needs analysis for

companies which pay the levy • Paying for training materials • To cover for product related training, such

as those commonly carried out by manufacturers and distributors.

The Fund should pay for training costs upfront alongside the reimbursement approach. This will assist levy payers who are experiencing cash flow problems.

For growth in quality training, the VTF should also be used to upgrade trainers for them to attain full accreditation. Lack of qualified trainers is a serious problem in Botswana

Considerations should be made for the Fund to cover employees who have paid for their own training, by allowing them to submit claims through their employers- if their employers are levy payers.

BOTA should consider developing standardized forms which would be used when applying for training outside Botswana.

“UP SKILLING BATSWANA”

THANK YOU