The Namibia Training Authority (NTA) is suing the City of Windhoek in the High Court over unpaid vocational education and training (VET) levies, penalties and interest amounting to more than N$51 million.
The VET levy is imposed on all Namibian-registered employers with an annual payroll of N$1 million or more. Such employers have to pay 1% of the value of their annual payrolls to the NTA’s National Training Fund.
The VET levy, which was gazetted by the government in 2014, is meant to enable the NTA to upskill and train Namibians in key national priority training and occupation areas.
In a claim filed at the Windhoek High Court, the NTA is demanding payment of an amount of N$51,4 million by the City of Windhoek for outstanding VET levy payments. Because the municipality has been defaulting on the levy payments, the NTA has been penalising it.
“In addition, and in terms of section 39 of the [Vocational Education and Training Act], the plaintiff [NTA] is entitled to levy a penalty of 10% of that unpaid amount, payable by the [City of Windhoek] in addition to the interest contemplated in section 38,” states the NTA’s claim.
Those two sections of the law deal with interest on the late payment of the VET levy and penalties on default of payment.
The NTA stated that the municipality has been registered as levy payer since 28 March 2014.
“The [City of Windhoek] is obliged to pay a levy to the plaintiff, or to an agent designated by the minister [of higher education], if the minister, after consulting the board of NTA, issues a notice in the Government Gazette to that effect,” the NTA claims.
The Gazette was published on 27 January 2014.
At the end of 2014, the municipality’s VET levy bill stood at N$4,6 million and accumulated to N$22,4 million on 31 December 2016.
When the outstanding amount stood at almost N$47 million in 2021, NTA acting chief executive Muvatera Ndjoze-Siririka wrote to retired municipality acting head George Mayumbelo about the outstanding balance.
“Despite our previous reminders, the below amount due, remains unpaid. Due amount: N$46 994 260.23,” the letter reads.
The NTA promised to take legal action if the amount was not settled.
This letter is contained as part of the court documents.
Last year, NTA’s lawyers wrote a letter to demand the outstanding levy fees.
“We are instructed that you are a registered employer with our client (NTA) since April 2014 and are in arrears of your monthly levy payments in the amount of N$51 474 305.61, as at 20 June 2022, which amount includes penalties and interest.
“Despite written requests to settle the above, you have failed to comply with your statutory obligations,” the letter reads.
However, the City of Windhoek hit back at the NTA, claiming that the levies are illegal.
“The City’s contention is that the levies are illegal ab initio (from the beginning). The City is, therefore, not liable to pay unlawful levies,” municipality spokesperson Harold Akwenye told The Namibian yesterday.
Akwenye argued that there were no consultations on the gazetted VET levy.
“There is a requirement that organs of the state must act lawfully and within the confines of the laws that govern them. There is a requirement that there should be consultations before these levies are gazetted. None of those consultations took place as required by law,” he said.
The City of Windhoek wants all local authorities to refuse to pay the levy.
“We trust that other local authorities will follow suit and refuse to pay unlawfully charged levies,” he said.
In 2022, higher education deputy executive director Raimo Naanda said over 2 800 employers are paying the levy.
The City of Windhoek has notified the court of its intention to oppose the NTA’s claim.
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