Sars’ Annual
Performance Plan
To afford you the opportunity
to gain a better understanding
of the South African Revenue
Service (Sars) Annual
Performance Plan 2016-
2017, we will highlight their
Customs undertakings.
This week we highlight
some of the “Strategic Risks
facing Sars”.
Commercial fraud on
imports
The risks to manage –
Incidents of import underdeclarations
not only create
leakage of potential customs
duties and value-added tax
(VAT), but also lead to risks of
illicit capital flow and foreign
exchange transgressions. We
have noted an increase in
the abuse of rules of origin,
valuation regime and tariff
classification.
How to manage the risks
– (i) Invest in building a
stronger and sophisticated
transfer pricing, valuation
and rules of origin capability
in both our systems and
people; and (ii) Participate in
the trade and international
customs bodies and initiatives
with other countries.
Implementation of the
Customs Control Act
and Customs Duty Act
and New Excise Act
The risks to manage – Sars
is required to make major
systems, policy and procedural
changes to implement the
new acts. The transition to
new infrastructures and
systems poses a risk to Sars’
operational continuity as
well as to trade and border
facilitation.
How to manage the risks
(i) Comprehensive design
and planning of legislative
implementation of New
Customs Acts Programme
(NCAP) in alignment
with all Sars process and
infrastructure requirements;
(ii) Ongoing involvement
and co-creation with all
stakeholders of the new
customs procedures and
processes for NCAP; (iii)
Perform effective testing of
all new systems required
for implementation, both
internally and with all
stakeholders; and (iv) Perform
effective training and
pro-active development of
Customs and Excise officers
to be competent in the NCAP
requirements.
85% of countries ratify
WTO TFA
Bangladesh has ratified the
World Trade Organisation
(WTO) Trade Facilitation
Agreement (TFA), the 94th
member to do so. It will enter
into force once two-thirds
of the WTO members have
ratified the TFA. Over 85% of
the required ratifications have
already been received.
Excise duty risk
The risks to manage –
Increased incidents of excise
fraud and smuggling of
excisable goods such as fuel
and cigarettes undermine
Sars’ efforts to improve
compliance and ensure a level
playing field for all taxpayers.
How to manage these risks
(i) Enhance specific excise risk
rules in the Sars risk engines;
(ii) Create a specialised
excise capacity within the
Customs and Excise regime;
(iii) Increase targeted audits
and inspections at the excise
manufacturing points and
at ports of entry; and (iv)
Introduce excise markers and
assurance mechanisms into
the production cycle to help
identify and track excisable
goods.
Duty Calls Watch List
Comment is due on (i) Sars’
second draft of the rules to the
Customs Duty Act, 2014 by
30 November; (ii) Daff’s
second draft of the
protection of the agricultural
Geographical Indications
(GIs) by 28 October; and (iii)
the review of the “general” rate
of customs duty on various
downstream steel products by
21 October.
DUTY CALLS
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