Below are selected highlights in the Customs & Excise environment since our last instalment.

  1. Amendment of Schedule 2 (anti-dumping duty) relating to Bolts & Nuts – deletion of 3 items.
  2. Draft amendment of Schedule 1 Part 1 to insert new provisions for vegetable oils marketed  and supplied for use in cooking food. Explanatory summary as follows:

The supply of vegetable oils (excluding olive oil) under section 11(1)(j) read with Item 14 in Part B of Schedule 2 to the VAT Act is zero-rated, provided the vegetable oils is marketed and supplied for use in the process of cooking food. These are also VAT exempt when imported under section 13(3) read with paragraph 7 of Schedule 1 to the VAT Act. The tariff amendment is required to align the relevant provisions in Schedule No.1 Part 1 of the Customs and Excise Act to those of the VAT Act.

Due date for comments: 25 August 2016; send comments to: AMpanza@sars.gov.za.

  1. Draft Rule Amendment by the insertion of Rule 49E relating to the preferential trade agreement between the Common Market of the South (MERCOSUR) and the South African Customs Union (SACU). Draft amendment of application forms also included. Explanatory Note as follows:

In December 2004, the Common Market of the South (MERCOSUR), comprising Argentina, Brazil, Paraguay and Uruguay, and the South African Customs Union (SACU), comprising Botswana, Lesotho, Namibia, South Africa and Swaziland signed a preferential trade agreement aimed at promoting trade between MERCOSUR and SACU on a select number of products. Rules in terms of the Customs and Excise Act, 1964 have been drafted to give effect to Annex III of the trade agreement.

Due date for comments: 29 August 2016; send comments to: C&E_legislativecomments@sars.gov.za.

  1. Draft Rule Amendment by the amendment of the time reflected in Rule 101A.12 when any tariff heading or item of any Schedule is amended. Explanatory Note:

Amendment of the “15:00 rule” regarding the electronic submission of clearance declarations when any tariff heading or item of any Schedule has been amended.

Due date for comments: 30 August 2016; send comments to: C&E_legislativecomments@sars.gov.za.

  1. The Davis Tax Committee (DTC) has published its comments in relation to the Border Management Agency Bill, 2015 on its website (www.taxcom.org.za).

The Bill provides for:

The establishment, organisation, regulation, functions and control of the Border Management Authority; to provide for the appointment, terms of office, conditions of service and functions of the Commissioner; to provide for the appointment and terms and conditions of employment of officials; to provide for the duties, functions and powers of officers; to provide for the establishment of an Inter-Ministerial Consultative Committee, Border Technical Committee and advisory committees; to provide for delegations; to provide for the review or appeal of decisions of officers; to provide for certain offences and penalties; to provide for the Minister to make regulations with regard to certain matters; and to provide for matters connected therewith.

In its comments, the DTC concludes as follows:

Based on the above, the Davis Tax Committee recommends that the functions and powers of SARS and the BMA be kept separate and that the Agency should not be assigned any of the current functions and powers of SARS with regard to revenue (taxes and customs and excise) collection and the control of goods that is associated with such collection functions. Of particular concern is the extraordinarily poor timing of the Bill. According to the 2014 Tax Statistics issued by SARS, the total of customs duties, import VAT, and ad valorem import duties collected amounted to R176.9 billion for the 2013-14 fiscal year. This was approximately 19% of the total revenue collected.