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  • Customs and excise and budget 2019 – what to know

Customs and excise and budget 2019 – what to know

20 February 2019

Cliff Watson, Director |

Treasury (and SARS) proposed several mitigating procedures to curb several Customs and Excise evasion areas. SARS started redrafting the aged Excise Duty legislative framework to align it with international norms. SARS will engage representative industry bodies and government to contribute to the process. Other excise reviews including considering the exemption of bulk wine movements from the compulsory tariff determination requirement, and the tax treatment of duty-free shops (to minimise abuse and risk). SARS will also extend the fiscal marking, tracking, and tracing intervention of other excise and levy goods to curb illicit trade and revenue loss.

Treasury and SARS have had the review of the Diesel Refund System on their radar for some time. They have made significant progress in defining primary production activities for different sectors and shifting the focus from eligible users to eligible activities. The Diesel Refund System still forms part of the VAT return. Processes introduced aim to design a standalone Diesel Refund Administration (which may seem to be a bit of an overkill). Draft rules and notes will be published for public comment this year, following industry and representative body consultations.

The Budget also contains certain Ad valorem Customs duty proposals to ensure consistent application across industries. These include application on televisions and monitors with screens larger than 45 cm, irrespective of their end use. Government will also consider confidential disclosure of names and associated reference numbers of customs clients to curb smuggling and illicit trade and financial flows and assisting with general tax administration. Treasury, in a surprise move, will (in conjunction with the DTI and Department of Economic Development) explore introducing an export tax on scrap metal. Although this may (perhaps marginally) increase revenue, the objective of the proposal is unclear, except that it may act as a control or measurement instrument.

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