BBBEE & Tax Incentives
A tax incentive for registered learnership agreements was introduced by the Minister in his
2002 Budget Speech. The purpose of this tax incentive is to –
- encourage job creation by reducing the cost of hiring and training employees through learnerships;
- promote skills development; and
- encourage human capacity development.
The Learnership Allowance provides benefits to companies by helping them reduce their overall tax liability and improving their BBBEE compliance. This is because skills development is given a priority portion in a BBBEE scorecard, and participating in learnerships is a recognized way to achieve those goals. Therefore, companies that invest in learnerships are not only helping their employees gain new skills and advance their careers, but they are also positioning themselves to reach higher levels of BBBEE compliance, which can have significant financial and reputational benefits.
How is the Annual Learnership Allowance Calculated?
The annual allowance is deductible in each year of assessment where the learnership agreement is in place.