On 26 February, in the Finance Minister’s National Budget, there were four important matters of interest from a Customs and Excise perspective, namely (i) Providing for the publication of tariff determinations, (ii) Exchanging information with the Department of International Relations and Cooperation, (iii) Progress with the review of the diesel refund administration, and (iv) Payments to the Southern African Customs Union (Sacu) are projected to decrease between 2020/21 and 2021/22, mainly due to estimated error adjustment of overpayments in 2019/20.
Exchanging information with the Department of International Relations and Cooperation: A review aimed at minimising abuse and risks associated with duty-free shops was announced in the 2019 Budget Review. The abuse of duty-free purchases by certain diplomats has become an increasing problem and disclosure of relevant information to the Department of International Relations and Cooperation will enable a response at a diplomatic level. It is proposed that Sars be permitted to disclose information regarding duty-free purchases by diplomats to the Director-General of the Department of International Relations and Cooperation.
Providing for the publication of tariff determinations:
The World Customs Organisation (WCO) advocates capacity building, skills development and knowledge sharing by customs authorities to enhance compliance with customs and excise legislation. Publishing tariff classifications will be useful in this regard and will contribute to consistency and transparency in the classification of goods. It is proposed that the Customs and Excise Act be amended to provide for the publication of tariff determinations and rules prescribing the circumstances in which such publication may take place, the kind of information that may be published and the manner of publication. Liability for duty in respect of imported goods: The liability for import duties rests with the master, pilot or carrier and only ceases when the goods are lawfully delivered, after due entry, to the importer or agent of the importer. Complaints by stakeholders have highlighted certain difficulties relating to the cessation of liability of the master, pilot or carrier at that stage. These difficulties include high shipping line charges for landside operations and the transport of goods for scanning, the favouring of shipping line transport, and the removal of containers to certain container depots with which shipping lines have private agreements. It is proposed that the Customs and Excise Act be amended to address these challenges by providing for licensed removers of goods in bond to move containerised goods from container terminals before they are released. The liability of the master, pilot or carrier will cease on delivery of the goods to a licensed remover. Provision will also be made for the assumption of liability by the licensed remover on receipt of the goods until their delivery.
Progress with the review of the diesel refund administration:
Sars recently published draft diesel refund rules and notes to the Customs and Excise Act for public comment. The draft is the result of National Treasury and Sars consultations with affected industries, including the 2017 discussion paper, Review of the Diesel Fuel Tax Refund System, industry-specific workshops conducted in 2018 and further technical inputs received from stakeholders during 2019. The draft presents a provisional outline for the review of the diesel refund administration to facilitate further industry engagements during 2020. The reform proposals and legislative framework will be refined further based on the outcome of the engagements.
Main budget framework
Payments to the Southern African Customs Union are projected to decrease between 2020/21 and 2021/22, mainly due to estimated error adjustment of overpayments in 2019/20.
Story by: Riaan de Lange