1pc levy diversion
24 September, 2018, 7:00 am
EMPLOYERS were “shocked” by Government’s announcement this year that funds they contribute for training of workers would be used to fund private doctors’ consultation fees and accident victims’ compensation payouts.
Fiji Commerce and Employers Federation (FCEF) CEO Nesbitt Hazelman said Government did not consult with the private sector before announcing its decision to utilise the levy for anything apart from workers training.
“It came as a shock to us,” he said.
“Right now employers have no incentive to train their staff and what this means is that a lot of people will not develop their skills beyond what they already have unless they have the ability to fork out from their own pockets.”
Government collects more than $20 million annually from businesses from 1 per cent of their gross turnover.
The National Training and Productivity Levy was established in 1973 to help employers fund training programs for their workers.
During post 2018-2019 budget discussions in Lautoka last month, Attorney-General and Economy Minister Aiyaz Sayed-Khaiyum said beginning January 1, 2019, Government would use 50 per cent of the levy to pay for private doctor consultation fees for every Fijian.
He also said the compensation payouts for death and injury — handled by the Accident Compensation Commission Fiji – would be funded by 40 per cent of the levy.
Mr Hazelman said FCEF was very concerned especially for small and medium-sized enterprises or Method B — as they are referred to — because they were the largest contributors to the 1 per cent levy.
“They are called Method B because they do not have in-house training departments, unlike Method A businesses who do.
“Government has argued that there is a 150 per cent tax rebate on those who contribute to the levy and conduct training but this only applies to businesses who post a profit or break even — what about those who don’t post a profit?
“What happens to NGOs and trade unions who are not-for-profit organisations?”
Mr Hazelman added that Government had informed the private sector that they could carry losses for the next four years in order to claw back the 150 per cent tax rebate.
“Claiming back is an administrative nightmare and it comes as a cost to business and then there is the justification process that employers will have to deal with.”
Questions sent to Employment, Productivity and Industrial Relations Minister Jone Usamate on Thursday, September 20, Friday, September 21 and again yesterday on the statements made by Mr Hazelman remain unanswered.