Customs feels the pinch as trade volumes plummet

Trade volumes dropped by a staggering 21% between October and December last year while the value of trade essentially halved between July 2008 and January this year. According to acting South African Revenue Service (Sars) Commissioner Oupa Magashula, customs revenue collections were down by 20% in February this year compared to the same period in 2008. Speaking at the annual South African Association of Freight Forwarders (Saaff) congress in Johannesburg recently, Magashula said it was important that the country focus efforts on facilitating existing trade, protecting the economy from unfair competition and ensuring that industrial policy was effectively implemented. “It is essential that smarter logistics becomes the key feature of our international supply chain, with reduced costs, improved turnaround times and greater Sars efficiencies,” said Magashula. “A reduction in our trade volumes knocks on in terms of lower actual and potential revenue collection. Economic crises also precipitate threats of evasion, avoidance and abuses of existing schemes and regimes, as distressed entities seek to cut down on overheads or shore up the bottom-line.” He said it had become imperative that South Africa harmonise its approach to world best practices while supporting process improvements that will ensure smarter and faster logistics. According to the 2007 World Bank Competitiveness Survey, South Africa ranked a reasonable 24 out of 150 countries in logistics competitiveness ahead of China which came in at 30 and India at 39. In terms of Customs procedures South Africa was 27 out of 150 while in terms of international shipping the country ranked 22 overall. “What we took from this survey was that supply chain efficiency can improve overall logistics competitiveness providing an important lever to support economic growth,” said Magashula. “It therefore necessitates a comprehensive design approach to enable the movement of goods rapidly, reliably and cheaply from point to point.”