Skills and Development Levy: is a levy collected by TRA under the Vocational Education Training Act and Income Tax Act.
SDL is charged based on the gross pay of all payments made by the employer to the employees employed by such employer in the particular time. It is important to understand that SDL is due and payable by an employer.
The gross emoluments is a sum of amount from salaries, wages, payments in lieu of leave, fees, commissions, bonuses, gratuity, any subsistence travelling , entertainment or other allowance received by employee in respect of employment or service rendered.
New SDL regulations
A new requirement has been introduced for employers to file a monthly tax return in respect of Skills and Development Levy. Failure to file such a return may result in late filing penalties.
Part XIII of the Tax Administration Act, 2015 (“Consequential Amendments”) includes amendments to various pieces of tax legislation, including Section 16(1) of the Vocational Education and Training Act, Cap 82), which now reads as follows: “Every employer shall file with the Commissioner on or before the seventh day of each month a return setting out the total gross monthly emoluments payable by the employer to employees in respect of the preceding month and the levy payable with respect thereto”.
Employers should make note of the new filing obligation, and immediately file a return for July 2015 (if not already filed). Use
So is the Employer’s obligation:
- To calculate the amount of the levy and pay the amount to Commissioners account to the respective Tax Region in which such employer is registered.
The SDL payments shall be made using form ITX 300.01.E – Employment Taxes Payment Credit Slip.
- To prepare a MONTHLY RETURN and submit to the TRA office on or before the 7th day of the month following the month of payroll.
- To prepare and remit half year certificate which tally with the monthly returns submitted during the period.
Who is liable for SDL?
Any employer who employs four or more employees shall pay SDL from gross emoluments.
The rate applicable for SDL is 5% of the total emoluments paid to all employees during the month.
The employee includes permanent employees, part time employees, secondary employees, casual laborers etc.
The SDL shall not be charged to:
(a) a Government department or a public institution which is wholly financed by the Government;
(b) Diplomatic Missions;
(c) the United Nations and its organizations;
(d) international and other foreign institutions dealing with aid or technical assistance;
(e) religious institutions whose employees are solely employed to-
(i) administer places of worship; or
(ii) give religious instructions or generally to administer religion;
(f) charitable organizations; or
(g) local government authority.”.