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The Industrial Training (Training Levy) (Amendment) Order, 2020 (the Amendment Order) was gazetted on 21 February 2020, introducing changes to the Industrial Training (Training Levy) Order, 2007 (the Order). The amendments have been made effective as of 23 December 2019.
One of the major changes introduced by the Amendment Order is the requirement that employees remit to the Director-General of the National Training Authority (NITA) a levy of KES 600 (approx. USD 6) per employee per year (or pro rata for part of a year) at the end of each financial year. This is a change from the previous requirement for employers to remit a levy of KES 50 (approx. USD 0.5) per employee monthly.
Employers will also be required to complete a levy payment form while remitting the levy at the end of each financial year. However, it is not clear whether the reference to ‘financial year’ refers to an employer’s financial year or the Kenya government’s.
An employer with less than 100 employees is exempted from the requirement to register with NITA for 12 months with effect from the business’ date of registration.
According to the Order, a person who was an employer at the date of its commencement is required to register with the Director-General of NITA within 30 days from its commencement date. A person who becomes a new employer after the Order has been made effective is required to register with the Director General within 30 days.
It is not clear whether the exemption of employers with less than 100 employees from registration also exempts such employers from paying the levy. Presumably, such employers are exempted as the levy payment form that an employer is required to submit requires that the employer includes their NITA registration number (which they wouldn’t have prior to registration).
Failure to comply with the requirement to pay the training levy at the end of each financial year attracts a penalty of a sum equal to 5 percent of the amount due. In addition, failure to comply with the Order constitutes an offence and attracts a fine of up to KES 100,000 (approx. USD 970). In addition, a penalty not exceeding KES 50,000 (approx. USD 485) applies for every month or part thereof during which such failure continues after a conviction.