Recent changes to the Industrial Training Fund Act

The Industrial Training Fund (Amendment) Act 2011 was signed by the president on 3 June 2011 and recently gazetted but dated 22 June 2011. The amendment has a commencement date of 3 June 2011.

The key changes are:

• Minimum threshold for an employer to become liable under scheme has been reduced from 25 employees to a minimum of 5 or annual turnover of N50 million.
• Required contribution is 1% of payroll to be paid by the prescribed date defined in respect of year 2011 to mean a date not later than 3 months from the date of commencement of the amendment, that is, 3 September 2011; and in respect of every subsequent year, means a date not later than 1 April of the following year. “Payroll” has now been defined to mean the sum total of all basic pay allowances and other entitlements payable within and outside Nigeria to any employee in an establishment, public or private. “Employees” means all persons whether or not they are Nigerians employed in any establishment in return for salary, wages or other consideration, and whether employed full-time or part-time and includes temporary employees who work for periods of not less than thirty days (previously 3 months in a year).
• Maximum refund now 50% (previously 60%) of the amount paid by an employer subject to the training programme of the employer being in accordance with the Fund’s reimbursement schemes.
• Action for recovery of contributions under the Act may now be instituted by agents of the Fund on behalf of the Director-General. Contributions include underpayment and any interest or penalty payable for late payment.

Comments

The changes introduced appear to focus on generating more revenue for the Fund rather than ensuring that the objectives for which the Fund was established are met. The reduction of refund to 50% is discouraging, one would have expected that with growing number of employers now required to contribute, the total fund available to the ITF should increase and therefore no justification for a reduction in percentage refund. Also, making employers with 5 employees or N50 million turnover liable under the Act is putting unnecessary burden on micro businesses. The punitive section which imposes a penalty of 5% for each month or part of a month on outstanding contribution should have been amended to be moderate and in line with best practice.

The Guidelines for refund claim under the ITF are cumbersome making it difficult for most employers to derive any benefit from the scheme. The new changes effectively mean that employers will have to pay more and get less.

 For details, read - What you should know and do about the Industrial Training Fund (Amendment) Act 2011

Comments

[Taiwo]

@Oluwakemi - Any company with less than 25 employees before the 2011 amendment does not have to pay anything in respect of previous years before the amendment.

[Taiwo]

@Victor - You can get relevant information or contact details from the ITF website http://www.itf-nigeria.com/

[Oluwakemi]

Many thanks for this post. But if im correct, the ammended act is silent on liability of companies that were under 25 staff but over 5 staff before the amendment in 2011. Are those companies suppose to pay the required 1% on previous years? Looking forward to you reply.

Thank you

[Alade victor]

where is the regional office of ITF for Benue and Nasarawa state.Thanks

[Taiwo]

@Hassan - Please visit ITF webiste for the required information.

[Taiwo]

@Adepitan - ITF is payable annually. There is no exemption on the basis of natural disaster.

[Taiwo]

@Apugu - Please go through our archive for a copy.

[Taiwo]

@Mr Kalejaiye - The agents are authorised to carry out any work that the ITF may delegate to them including audit of past years. What they should not do is assessment and actual collection and they must show you an authority letter from ITF.

[Mr Kalejaiye]

Thank you Mr Oyedele for this posting.

I will be grateful if you could Kindly assist in answering the below questions:

Whether the appointed Agents of ITF (Industrial Training Funds) are now empowered to visit companies for Audit, requesting for Audited Reports and payroll of Companies without any form of letter from ITF itself to the company to be Audited?
Are they empowered to Audit your companies books from Company's inception to date or from the amendment date of the Act (for a Company with a staff strength of below 25)?
To what extend should be your cooperation with them especially if you are already complying with the ITF requirement with effect from the date of Amendment

[Mr Kalejaiye]

Thank you very much for this posting Mr Oyedele.
Kindly assist to answer the below questions:

Are the appointed Agents of ITF now empowered to visit companies for Audit, requesting for Audited Reports and payroll of Companies without any form of letter from ITF itself to the company to be Audited?

[Apugu Samuel]

please can i have a copy of the full text of the new act (2011 edition)? Thanks.

[Adepitan]

How many times in a year are companies to pay this ITF fee. Is a company affected by natural disaster exempted from paying this ITF fee. Thank you,awaiting your reply.

[Wale Adedeji]

The agency has lost focus going by its approach of utilising the services of lawyers to ensure compliance instead of embarking on enlightenment campaign and ensuring that employers get adequate benefits from the scheme. I only hope that the agency has not been turned to another revenue generating agency.

[hassan]

kindly give me the procrdure of company registration with itf

[Taiwo]

@Kayode - I am not aware of any decided case on the ITF Act. Taxpayers are encouraged to challenge any provisions of the law they consider inappropriate.

[Outsource flash design]

This is very nice post thank you so much ! Thanks again.

[Kayode Kudaisi]

Dear Mr Oyedele,

Was there any decided case on ITF act? Possble you let us in if any?

Thanks

Kayode

[bode akinboyo]

The ITF has lost focus of its objectives and no value added whatsoever. Recently they have even stepped up their enforcement by using lawyers with threat letters to enforce payment. This is not proper.

[Kayode Kudaisi]

Dear Mr Oyedele,

Thanks for the posting. Possible I get a copy of the act?