Customs specialist spells out impact of new bill on buying commission

A PROPOSED change to the definition of "buying commission" by South African Customs in the new draft Revenue Amendment Bill will have substantial consequences for thousands of importers and their agents, according to Hester Hopkins, national manager of Customs @ Wylie. South African Customs currently allows the buying agent to also pay for the goods. “In SA buying commission is considered to be any fee paid by an importer to his agent for representing him abroad in the purchase of and payment of the goods,” she says. This could change as South Africa aligns itself with the WTO GATT agreement, which considers buying commission to be a fee paid by an importer to his agent for the service of representing him abroad in the purchase of the goods being valued. “This deviation is due to be stubbed out in the new Draft Revenue Amendments Bill currently out for comment,” says Hopkins. SA Customs is proposing that its current definition be aligned with that of the GATT Agreement by removing reference to "payment". “Thus, for buying commission to be considered not dutiable, the buying agent may not pay for the goods on behalf of the importer. “The change in definition will trigger a review of buying agents' contracts en masse. Not reviewing whether buying commission will be dutiable or not might leave importers at risk of contravening the Customs Act by deducting buying commission from the transaction value, when in fact it is not legally allowed,” she says. Comments on the draft amendments are due by September 5.