Customs could soon be paying you interest!

Customs could soon be paying interest to its customers if the latest proposed amendments to the Customs & Excise (C&E) Act are adopted, according to a legal expert. Debtors have always had to pay interest on outstanding amounts in terms of S105 of the Customs & Excise Act, according to Quintus van der Merwe of Durban-based lawyers, Shepstone & Wylie. “It has long been a sore point that there is no reciprocity,” he said. “Customs does not currently pay interest on outstanding amounts. This is about to change.” And the change, Van der Merwe added, is in terms of the Taxation Laws Second Amendment Bill B11, dated August 27, 2009. “Section 105 of the Customs and Excise Act 91 of 1964 is to be amended, “making customs liable for the payment of interest on outstanding drawbacks or refunds.” According to Section 105(a): “interest shall be payable from such date and for such period as the Commissioner may prescribe by rule on any outstanding amount payable in terms of this Act.”. This section currently includes “…other than the outstanding amount of any penalty or forfeiture payable in terms of this Act;”. Said Van der Merwe: “One would then logically conclude that, once the amendment is promulgated, the Commissioner will be liable for the payment of interest on outstanding amounts due to C&E clients and that he may also charge interest on outstanding penalty and forfeiture amounts.” Meanwhile, Section 105(b) states: “interest shall be payable by the Commissioner on any drawback or refund contemplated in section 75 or 76 from such date and for such period as the Commissioner may prescribe by rule;”. “Effectively,” said Van der Merwe, “interest will be payable by the Commissioner on any valid drawbacks or refunds claimed after this section comes into operation.” “The period for which interest is payable is to be prescribed by rule, and the interest rate is to be determined in terms of Section 80(1) (b) of the Public Finance Management Act 1 of 1999, and is subject to change.” This legislation comes into operation on a date fixed by the President by proclamation in the Gazette, and Van der Merwe added that this actual date would be a matter of keen interest to everybody in the freight and associated industries – all those who have financial dealings with the customs authorities.