The National Treasury has announced a proposed amendment of the Customs and Excise Act, 1964 (the Act, 1964), so as (i) to make technical corrections; (ii) to expand the purposes for which air cargo may be removed to degrouping depots to include consolidation and removal to transit sheds for export; (iii) to effect amendments consequential to changes to the South African Revenue Service (SARS) customs accreditation system; (iv) to increase the minimum thresholds for underpayments of duties by taxpayers which the SARS Commissioner may condone as well as the minimum thresholds for refunds of duty to taxpayers; (v) to expand the scope of matters that SARS may investigate to confirm the validity of a diesel refund claim; and (vi) to make the unlawful possession or use of a customs uniform an offence.
Draft Memorandum on the Objects of the Tax Administration Laws Amendment Bill, 2021
Purpose of Bill
The Tax Administration Laws Amendment Bill, 2021 (the Bill), proposes to amend the Estate Duty Act, 1955, Income Tax Act, 1962, the Act, 1964, and the Tax Administration Act, 2011.
2.10 Interpretation of expression “Trade and Industry” where it occurs in certain provisions of the Act, 1964
The proposed amendment aims to correct the different references in the Customs and Excise Act to the Department currently known as the Department of Trade, Industry and Competition.
2.11 Amendment of section 6
Section 6(1)(hC) contemplates inter alia the unpacking or deconsolidation of imported air cargo at degrouping depots. Current practice has however shown that there is also a need to regulate the consolidation of air cargo at degrouping depots for export and the removal thereof to transit sheds. The proposed amendment is intended to expand the purposes for which air cargo may be removed to degrouping depots to include consolidation and removal to transit sheds for export.
2.12 Amendment of section 38A
The effect of the proposed amendment is that not only accredited licensees or exporters will be able to supply goods to foreign going ships or aircrafts on the issuing by that such licensee or exporter of a dispatch and delivery note or such other document as the Commissioner may prescribe or approve by rule. This amendment is as a result of the announcement in Budget 2021 that SARS is changing its accreditation system to more closely reflect the requirements of the SAFE Framework of Standards issued by the World Customs Organization.
2.13 Amendment of section 47
The proposed amendment aims to ease the administrative burden on taxpayers and on SARS by increasing the minimum thresholds for underpayments of duties by taxpayers, which the Commissioner may condone. A similar amendment is proposed in respect of section 76 in relation to minimum thresholds for refunds of duty to taxpayers.
2.14 Amendment of section 64E
The repeal of subsection (4) is proposed as a result of changes to SARS’ accreditation system announced in Budget 2021. Subsection (4) is outdated.
2.15 Amendment of section 75
Paragraph (a): The proposed amendment is a technical correction. Paragraph (b): Section 75(1C)(a) provides the scope for what SARS may investigate to confirm the validity of a diesel refund claim. Currently subparagraph (iii) only caters for the diesel delivery and storage practices of users and their “dry” contractors (where the diesel is provided to the contractor by the user), but not “wet” contractors (where the contractor obtains the diesel itself). The proposed amendment is required as the policy intention is to accommodate “wet” contractors in the diesel refund scheme in the future. Furthermore, it will ensure that smaller users are not excluded as they often collect and dispense their diesel purchases directly for use without it being stored at the user’s premises.
2.16 Amendment of section 76
The proposed amendment increases the minimum thresholds for the payment of refunds by SARS to ease the administrative burden on SARS. The amendment to section 47(1) in relation to minimum thresholds for collection of underpayments of duty is proposed for purposes of equity.
2.17 Amendment of section 79
The proposed amendment aims to specifically make the unlawful possession or use of a customs uniform an offence.
The Bill is accessible at:
Story by: Riaan de Lange