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Important amendments to BBBEE Codes

Amendments to the BBBEE Codes will affect your compliance initiatives if you fail to adhere to the changes.

With South Africa’s new government coming into power after the 2019 elections, it has become apparent that changes are on the horizon. With that said, amendments to the BBBEE Charter will be coming into effect later this year. As a business you are urged to realign your Skills Development compliance strategies to ensure you don’t fall by the proverbial wayside.

The Amendments have been made under Revised Code 000 General Principles, Interpretation and Definitions Revised Schedule 1, Skills Development Revised Code 300 and Enterprise & Supplier Development Revised Code 400.

Of particular interest are the Amendments to the Skills Development Code, points to note include:

  • Internal training department cannot exceed 15% of your Skills Development expenditure.
  • The indicators for Employed and Unemployed learnerships are now combined.
  • Weighting points for Skills Development expenses reduced from 8 to 6 points.
  • Category F&G are no longer capped at 15%, but at 25% (excl. travel and accommodation – 15%).
  • Double counting is not allowed between Skills Development Expenditure on Learning Programmes specified in the learning Programme Matrix for black people and Skills Development Expenditure on bursaries for black students at higher education institutions.
  • Spend on bursaries for black students attending higher education institutions has been introduced (target of 2,5% leviable amount and 4 weighting point).
  • Stipends linked to bursary programs now a legitimate learning cost. This was previously limited to cat B, C &D programs.
  • Definition for a bursary or scholarship scheme now specifically includes costs for funding for subsistence or accommodation during the period of study.

Supplier Development (ESD) Code Amendments for Key Enterprises to note:

  • In terms of the Benefit Factor Matrix; 50% of guarantees provided on behalf of a Beneficiary can be claimed instead of 3% as before.
  • The increase in the points and target in respect of procurement from 51% Black Owned Suppliers strengthens the significance of black ownership and weakens the significance of a suppliers BEE level.
  • Procurement Spend with 51% Black Owned Businesses – points have increased from 9 to 11 and the target from 40 – 50%.
  • The multiplier of 1.2 (for first-time suppliers) is removed and replaced by a 1.2 recognition boost for purchasing from 51% Black Owned or Black Women Owned suppliers. These qualifications are achieved using the flow-through principle.
  • Beneficiaries of ED and SD contributions must be 51% Black Owned or black Women Owned (EME or QSE) suppliers whose qualifications are achieved using the flow-through principle.

Summit’s team of compliance specialists will guide you through this process to ensure your business fully complied with the Amendments. If in doubt, please contact us to see how we can assist you.

Remember, time is running out – act now to avoid missing out. Contact us today!