On the 1st of December 2017, the Amended Construction Sector Code was published in terms of Government Gazette number 41287. This Sector Code made provision for increased targets under the Ownership Element as well as the Skills Development Element after the third year of the publication of the Sector Code. This means that as of the 1st of December 2020, these new increased targets will come into effect.
How does this affect your business? The increased targets must be taken into account for any verifications that will take place after the 1st of December 2020. The target changes will be introduced as follows:
Generic Enterprises: Contractors with an annual turnover above 50 million Rand and BEP’s with an annual turnover above 25 million Rand
Ownership:
- The target for Voting Rights in the hands of Black People will increase from 32.5% to 35%;
- The target for Voting Rights in the hands of Black Females will increase from 10% to 14%;
- The same targets will be applicable to the Economic Interest indicators for both Black People and Black Females;
- The targets for economic interest for Black natural people (Designated Groups, Broad-Based Ownership Schemes, Employee Ownership Schemes and Co-operatives) will also increase as follows:
- BEP from 10% to 12%;
- Contractors from 5% to 6%.
Skills Development
- The target for Skills development will increase from 2% of the entity’s annual payroll (leviable amount) to 2.5% for both BEP’s and Contractors.
Qualifying Small Enterprises: Contractors with an annual turnover between 10 and 50 million Rand and BEP’s with an annual turnover between 6 and 25 million Rand
Ownership:
- The target for Voting Rights in the hands of Black People will increase from 25% to 30%;
- The same targets will be applicable to the Economic Interest indicator.
Contact your legal advisor to assist you with preparation around the new targets so that you have the best possible strategy to achieve your desired BEE level.
“SMS” the word “SEESA” to 45776 with your query and a professional Legal Advisor will contact you!
About the Author: Stephen Strydom obtained his BCom (Law) and LLB degree from the University of Pretoria. He is employed as a legal advisor in the BEE department at SEESA’s Cape Town office.