SAIT INDIRECT TAX CUSTOMS & EXCISE MONTHLY NEWSLETTER ISSUE 4- April 2024
April 2024 Activities
The AfCFTA discussed five key point:
Reference: Online: https://au-afcfta.org/#; Date: 26 April 2024
SAIT Customs Comment
The guided trade initiative, Smart AfCFTA, NTB online reporting mechanism, AfCFTA Adjustment Fund, and the PAPSS represent key initiatives under the AfCFTA aimed at streamlining trade processes, addressing challenges, and promoting intra-African trade.
These initiatives are designed to enhance market access, reduce trade barriers, simplify trade procedures, provide financial support for adjustment, and facilitate instant cross-border payments, ultimately benefiting traders by offering improved trading conditions, increased opportunities for market expansion, decreased costs and delays, enhanced access to financial resources, and efficient payment mechanisms, collectively driving overall growth and prosperity in the African trading community.
April Activities
In its inaugural year of operation, the BMA in South Africa has effectively thwarted more than 281 000 unauthorised entries into the country, marking a significant milestone in enhancing border security.
This achievement underscores the BMA's pivotal role in controlling various critical functions such as immigration, health, agriculture, and environmental oversight at all entry points across the nation.
Commissioner Michael Masiapato has rightfully highlighted the BMA's success in consolidating and streamlining border control duties that were previously dispersed among multiple government departments and security forces. By centralising these responsibilities, the BMA has demonstrated the advantages of a unified and coherent approach to border protection. This integration likely resulted in improved coordination, operational efficiency, and overall effectiveness in managing South Africa's diverse entry points.
Commissioner Masiapato's emphasis on the agency's accomplishments underscores the necessity of establishing a specialised entity like the BMA to address the multifaceted challenges associated with modern border management. By bringing together various functions under one umbrella, the BMA has shown that a cohesive security institution can better address complex transnational threats, bolster border controls, and enhance overall national security.
SAIT Customs Comment
The performance of the BMA within its first year sets a robust foundation for future operations and underscores the critical significance of strategic and unified approaches to border management.
This success story not only showcases the BMA's pivotal role in safeguarding national interests but also highlights the importance of comprehensive, integrated border security measures in upholding the safety and security of South Africa.
Excise
Below are some general updates to the Customs and Excise Act, 1964 (the Customs Act):
Date |
Theme |
Description |
28 March 2024 |
Excise – Ad Valorem Excise Duty
|
The amendment refers to Ad Valorem Excise Duty payable on certain locally manufactured goods and goods imported of the same class or kind.
Ad Valorem Excise Duty is determined in terms of Schedule 1 Part 2B, which specifies the goods on which duty is levied, each with its own applicable rate of duty.
The policy and annexure have been updated to align with legislation.
SE-ADV-02 – Ad Valorem Excise Duty – External Policy SE-ADV-02-A01 – Ad Valorem Value Determination – External Annexure |
Reference: Online: What's New at SARS | South African Revenue Service; Date: 22 April 2024
Customs
Date |
Theme |
Description |
24 April 2024 |
Registration, Licensing and Accreditation
|
The amendment refers to the facility codes used in Box 30 on the Customs Clearance Declaration (CCD) have been updated to include the details of the new approved container depots,
SC-CF-19-A02 – Facility Code List – External Annexure
|
Reference: Online: What's New at SARS | South African Revenue Service; Date: 25 April 2024
Information Technology
Date |
Theme |
Description |
24 April 2024 |
Digital platforms upgrade on 26 to 28 April 2024
|
The amendment refers to the SARS aims to achieve its Vision 2024 of becoming a smart, modern organisation with high integrity by emphasising the importance of digital platforms and technology infrastructure that are highly available, robust, and secure. To ensure clarity, ease of compliance for taxpayers and traders, and to build public trust, SARS is scheduled to upgrade its digital platforms from Friday, 26 April 2024, to Sunday, 28 April 2024, potentially causing intermittent service interruptions. Stakeholders are advised to submit priority Goods Declarations by Friday, 26 April 2024, at 14:00 to minimise disruptions during the upgrade process. |
Reference: Online: What's New at SARS | South African Revenue Service; Date: 25 April 2024
Draft Amendments to Schedules
Draft Amendment to the Customs Act:
Due Date for Comments |
Legislation Category |
Description |
Send Comments To |
30 April 2024 |
Customs and Excise Act, 1964
|
The draft amendments refer to the Note 8 to Schedule No. 5 comments to be recorded on the Customs & Excise Tariff Amendments Comment Sheet.
Explanatory Note
Note 8 to Schedule No. 5 is amended to include the reference to refund item 541.01 so that the item can also comply to the requirement of Note 8. |
|
Reference: Online: Draft Documents for Public Comment | South African Revenue Service (sars.gov.za); Date: 23 April 2024
Draft Documents for Public Comment:
Due Date for Comments |
Legislation Category |
Description |
Send Comments To |
10 May 2024 |
Customs and Excise Act, 1964
|
The draft amendments to rules and forms: Draft amendments to the rules under sections 21(1), 60 and 120 – Storage of imported bunker fuel in special customs and excise storage warehouses.
DA 185 – Application form – Registration or Licensing of Customs and Excise Clients.
DA 185.4B4 – Licensing Client Type 4B4 – Special storage warehouse.
DA 185.4B17 – Licensing Client Type 4B17 – Marine remover of imported bunker fuel.
Comments on rules and forms to be recorded on the Customs & Excise Rule Amendments Comment Sheet.
Draft amendments to Schedule
Draft amendment to Schedule – Additional Note 1(h) to Chapter 27 of Schedule No. 1 comments on the schedule to be recorded on Customs & Excise Tariff Amendments Comment Sheet. Explanatory Note
Date published: 19 April 2024 |
Comments on rules and forms: C&E_Legislativecomments@sars.gov.za
Comments on Schedule:
|
Secondary Legislation
Tariff Amendments 2024:
Date |
Theme |
Description |
Implementation Date |
5 April 2024 |
GG and Notice Numbers GG 50431
|
The amendment refers to Part 1 of Schedule No. 1, by the reduction in the AfCFTA rates of duty, with retrospective effect from 31 January 2024, being the date, the agreement was implemented.
|
With retrospective effect from 31 January 2024 |
Reference: Online: Tariff Amendments 2024 | South African Revenue Service (sars.gov.za); Date: 23 April 2024
Date |
Theme |
Description |
Implementation Date |
5 April 2024 |
GG and Notice Numbers GG 50431
|
The amendment refers to Part 1 of Schedule No. 1, by the reduction in the rates of duty on minced anchovies as recommended in Commission’s Report 719, with retrospective effect from 1 March 2024, being the date, the amendment was implemented. |
With retrospective effect from 1 March 2024
|
Reference: Online: Tariff Amendments 2024 | South African Revenue Service (sars.gov.za); Date: 23 April 2024
Date |
Theme |
Description |
Implementation Date |
5 April 2024 |
GG and Notice Numbers GG 50431
|
The amendment refers to Part 1 of Schedule No. 1, to implement the correct AfCFTA rates of duty on various tariff subheading to align with the AfCFTA Agreement |
5 April 2024
|
Reference: Online: Tariff Amendments 2024 | South African Revenue Service (sars.gov.za); Date: 23 April 2024
SAIT Customs Comment
The agreement between the World Customs Organization (WCO) and the World Trade Organization (WTO) regarding the Trade Facilitation Agreement (TFA) is essential for enhancing trade efficiency and transparency.
According to Articles 1 and 2 of the TFA, customs administrations must provide timely and detailed information to the private sector about amendments to customs legislation.
This collaboration ensures that businesses are well-informed of regulatory changes that impact their trade processes, thus helping them to comply with the law effectively.
Keeping traders abreast of such changes not only fosters compliance but also spurs innovation and competitiveness in the global market. Moreover, inviting public comments on proposed changes fosters inclusive decision-making and promotes a business-friendly environment by addressing concerns and gathering valuable insights from stakeholders.
Reference: Online: https://www.wcoomd.org/-/media/wco/public/global/pdf/topics/facilitation/activities-and-programmes/tf-negociations/wto-docs/tntf/2014/931-en.pdf?db=web ; Date: 23 April 2024
PART D – GENERAL MATTERS OF INTEREST
April 2024
E-commerce has significantly transformed the landscape of international trade, introducing a deluge of small parcels being shipped across borders. However, a significant issue that arises is the de minimis threshold dilemma.
Many e-commerce transactions involve low-value orders that fall below the de minimis value threshold set by customs authorities.
This presents challenges for customs administrations in terms of efficient processing, revenue collection, and ensuring compliance with regulations.
To address these challenges, several remedies can be considered:
The characteristics of cross-border e-commerce, as defined within the context of the WCO’s Framework of Standards, include online ordering, sale, communication, and payment, involving transactions and shipments across borders. This primarily pertains to physical goods intended for consumers, both commercial and non-commercial. While the framework focuses on Business-to-Consumer (B2C) and Consumer-to-Consumer (C2C) transactions, it also encourages Members to extend similar principles and standards to Business-to-Business (B2B) transactions (reference: Online https://www.wcoomd.org/-/media/wco/public/global/pdf/topics/facilitation/activities-and-programmes/ecommerce/wco-framework-of-standards-on-crossborder-ecommerce_en.pdf?la=en; date: 29 April 2024).
In preparing for the ongoing growth in global online ordering, customs administrations must address several key challenges:
By proactively implementing solutions such as tailored e-commerce frameworks, electronic entry systems, and improved collaboration, customs administrations can better manage the complexities of the evolving e-commerce landscape and prepare for the continued growth in global online ordering.
Reference: Online: : https://www.dcvelocity.com/articles/29967-curse-of-the-internet-e-commerce-creates-new-challenges-for-customs; Date: 29 April 2024
PART E – CONCLUSION
Navigating South Africa’s low Economic Growth Forecast: Implications for Customs Operations Amidst Infrastructure Challenges
The International Monetary Fund (IMF) forecasted South Africa's growth rate for 2024 at 0.9% citing various challenges such as poor road and rail infrastructure, inefficiencies at ports, and the impact of load shedding on industries.
These factors are significant impediments to economic growth and development in the country.
If the IMF forecasts a 0.9% growth rate for South Africa, it could have implications for customs operations in the country in the following ways:
In response to a lower growth forecast, customs authorities may need to adapt their strategies, prioritise resource allocation, enhance risk management practices, and focus on maintaining efficient trade processes to navigate the economic challenges effectively.
In conclusion, customs play a critical role in managing trade flows and ensuring compliance with regulations, especially during periods of lower economic growth forecasts.
With the challenges posed by infrastructure deficiencies and economic uncertainties, it is our view that customs authorities should adapt to changing trade dynamics, enhance their enforcement capabilities, and optimise their resources to facilitate trade efficiently while safeguarding against illicit activities.
By implementing strategic measures, investing in technology and capacity building, and fostering collaboration with international partners, customs can possibly mitigate the impact of a lower growth forecast and contribute to maintaining the integrity of the trade ecosystem in South Africa.