The Industrial Training Fund Act (ITFA) came into effect on the 8th of October 1971. The Industrial Training Fund Act has been amended by the Industrial Training Fund (Amendment) Act 2011. The purpose of the Act was to establish a Fund called “The Industrial Training Fund (ITF)” to promote and encourage skill acquisition in industry or commerce in Nigeria, for the purpose of generating a trained manpower sufficient to meet the needs of the economy.
The Act seeks to ensure and secure the provision of training for employees or those intending to be employed in industry or commerce and approve courses and facilities provided by employers. In addition, the Act requires employers to provide adequate training for their indigenous staff with a view to improve on the skills related to their job.
The minimum threshold for an employer to be liable for industrial training fund contribution under the Act has been reduced from 25 employees to a minimum of 5 employees or a turnover assets of N50 million and above per annum.
The required contribution for employers to remit to ITF is 1% of payroll of its employees, 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 Act which is the 3rd of September 2011 and in respect of every subsequent year, which means a date not later than 1st of April of the following year.
“Payroll” has 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.
Eligibility of persons required to register and remit to ITF
- Every employer having either five (5) or more employees in its establishment, or having less than 5 employees but with a Turnover of N50m and above per annum, shall, in respect of each calendar year and or the prescribed date, contribute to the Industrial Training Fund 1% of its total annual payroll.
- Any Supplier, contractor or consultant bidding or soliciting contracts, businesses, goods and services from any Federal Government Ministry, Department, Agency, commercial, industrial and private entity is required to fulfill the statutory obligations of its employees with respect to remitting payment of Training Contribution to ITF.
- Any organization either public or private including companies situated in the Free Trade Zones who require the approval for expatriate quota and/or utilizing custom services in matters of export and import, must show proof of compliance with the ITF Act in respect of payment of training contribution of its employees.
Registration Requirements for ITF Compliance Certificate for new Employers
- A prospective Employer with a minimum of 5 employees is expected to complete ITF Form 7A which is available online.
- The completed Form 7A is to submit to the nearest ITF Area Office in the jurisdiction the company is registered, to be submitted with the prescribed documents to the ITF Area Office.
Registration Requirements for ITF Compliance Certificate for a newly formed company with less than 5 Employees
Generally, the statutory requirement to be liable for remitting 1% from the annual payroll of employees is that the company must have been remitting for a minimum of 1 year and must have a minimum of 5 employees. However, concession is granted for employers who require the compliance certificate for other business services.
The requirements for a new start-up company with less than 5 employees to register with ITF are:
- Write an application letter in the company’s letterhead, addressed to the Area Manager of ITF, requesting that the compliance be issued to the company, while stating the reason for the demand.
- Submit the letter to the ITF office located within the jurisdiction of the company’s registered address, accompanying it with the Certificate of Incorporation of the company.
- Make a payment of N100, 000 (One Hundred Thousand Naira) to the ITF account for the application.
- Upon satisfaction, the certificate will be issued to the employer.
Registration Requirements for ITF Compliance Certificate for Obligated Employers
- Already registered employers and companies are expected to complete the ITF Form 5A.
- Submit the completed ITF Form 5A to the ITF Area Office where the company is registered for vetting of their liability to the Fund
- Generate RRR on the ITF Pay-Portal or Remitta platform.
- Make payment into ITF Account through Banks.
- Submit evidence of payment to the Area Office.
- The Area Office will then issue a Compliance Certificate to the Employer.
In conclusion, there are penalties for an employer who fails, neglects or refuses to remit the required employees’ ITF returns.
Also, any employer who knowingly or recklessly furnishes information or returns which is false, or who willfully makes a false entry regarding the contributions to the Fund shall be guilty of an offense carries a fine of N500, 000 for a first offense, and N1, 000,000 for each subsequent offense.
The penalty for any employer of a company that commits any of the above-mentioned offenses is a fine of N50, 000 or two years imprisonment for a first offense, and three years imprisonment without the option of a fine for each subsequent offense.