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What is the purpose of the Skills Levy Act in South Africa

In South Africa, there is a levy system called the Skills Development Levy (SDL), which is governed by the Skills Development Act of 1998. This legislation aims to promote skills development and combat unemployment by funding education and training initiatives. The purpose of the Skills Development Levy is to encourage employers to invest in the skills development of their employees, which, in turn, helps to enhance productivity, improve the quality of the workforce, and address the skills shortage in the country.

Under the Skills Development Act, employers are required to pay a percentage of their total payroll (levy) to the South African Revenue Service (SARS). This levy is used to finance various sector-specific training programs, learnerships, apprenticeships, and other skills development initiatives. Employers who contribute to the Skills Development Levy can also claim back a portion of the levy through submitting a Workplace Skills Plan (WSP) and Annual Training Report (ATR), which outlines their training and development activities for the year.

The main goal of the Skills Development Levy and associated regulations is to create a skilled and adaptable workforce that can contribute to the growth and competitiveness of the South African economy while providing individuals with better opportunities for employment and personal development.

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