BANKSETA ANNUAL REPORT 2023

ANNUAL FINANCIAL STATEMENTS NOTES TO THE ANNUAL FINANCIAL STATEMENTS for the year ended 31 March 2023

29.1.1 (continued)

DHET approved the 2021/22 surplus and its utilisation in 2022/23 budget and thereby the increased revised 2022/23 budget deficit. Legislation requires that the SETA annually in August submit a budget for the following year to the Minister for approval. The BANKSETA therefore submitted the budget for 2023/24 financial year and has received approval.

29.2 Skills Development Levy: Income from non-exchange transactions The levy receipt for the current year was 9% higher than the revised 2022/23 budgets for the year.

The major stakeholders in the banking sector posted strong results.

This was reflected in the skills development levy receipts.

29.3 Skills Development Levy: Penalties and interest from non-exchange transactions Income from penalties and interest arise when employers fail to comply with taxation legislation, either through late or inaccurate declarations or late payments. The level of such penalties and interest indicates the non-compliance in the sector. These level of interest and penalties amounts typically vary significantly year on year. The full amount received is made available for discretionary projects. This year the amount decreased by 9.4% from prior year. The significant drop this year from prior year indicates improved tax compliance. BANKSETA does not budget for tax non-compliance. 29.4 Investment revenue from exchange transactions Investment revenue from exchange transactions was 49% greater than budgeted due to the increase in investment rates in line with the South African Reserve Bank increasing rates. 29.5 Employer grant The approved final budget includes the estimated mandatory grant spending of the current financial year based on budgeted mandatory levies and mandatory grants percentage of 20%. The increase in mandatory grant expenditure is 5% above budget and 18% above prior year is in line with the increased mandatory levies received. The mandatory grant claim ratio was in line with prior year at 97.7%. 29.6 Project and discretionary grant expenditure R249 500 000 was added to the 2022/23 budget discretionary grant budget during the year. However, the majority of this was only added in January 2023 due to the late approval of the 2021/22 surplus. This left little time to implement additional projects leading to the 2022/23 discretionary grant expenditure being 6% below the revised budget. The entry and completion of training and skills development programmes and disbursement of discretionary grants has escalated leading to 50% higher discretionary grant expenditure compared to the prior. This is mainly due to:

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PART F: FINANCIAL INFORMATION | BANKSETA ANNUAL REPORT 2022/23