Duty Calls

24 Feb 2017 - by Riaan de Lange

Diesel Fuel Tax Refund

In its first discussion paper

since 2014, National Treasury

and the South African

Revenue Service (Sars) on

15 February published its

‘Review of the Diesel Fuel Tax

Refund System’ for comment

by 15 May.

According to the media

release, these discussion

papers are published to

obtain comment on specific

tax policy matters before

draft tax legislation or a

draft interpretation note is

prepared.

Presently the diesel refund

system, introduced in the

year 2000, provides full or

partial relief for the fuel levy

(FL) and Road Accident

Fund (RAF) levy to primary

producers in the agriculture,

forestry, fishing and mining

sectors. Introduced in a

phased approach, it is aimed

at protecting international

competitiveness of local

industries and reducing the

road-related tax burden of the

RAF levy for certain non-road

users.

The discussion document

follows announcements in

the 2015 National Budget

to undertake a review of

the administration system

to address anomalies

in the system related to

qualifying activities and

beneficiaries. National

Treasury and Sars committed

to explore alternative,

more equitable rules and

administrative procedures

following consultation

with affected industries.

The implementation of

the new standalone diesel

refund administration

will have to be phased in

to ease the compliance

burden on beneficiaries and

administrative burden on

Sars.

The design of the proposed

new system is envisaged to be

finalised by the end of 2017

after the public consultations,

followed by an announcement

of the details in the 2018

National Budget.

CEL Budget Changes

On 22 February the

Finance Minister will have

presented the 2017 National

Budget to Parliament. As

you may well be reading this

column prior to its release,

have you given any thought

to possible customs duty,

excise duty and levy (CEL)

changes?

Demise of Ad Valorem

Duties

If I had one CEL wish it

would be for the demise

of the ad valorem duties

of Schedule No1 Part

2B to the Customs and

Excise Act, 1964. For one,

its conflicting naming

convention should be

relegated to the past,

even though it is a recent

amendment.

As per the schedule’s

title, ad valorem excise

duties are imposed on

“locally manufactured

goods or on imported

goods”. But excise duties

are payable on locally

manufactured goods only.

Also, the schedule is a

relic of the past. It still

imposes duties on ‘line

telephone sets with cordless

handsets’, ‘cathode-ray tube

monitors’, and ‘muzzleloading

firearms’ to name

a few. It also contains

a number of products

which by no stretch of

the imagination could be

considered to be ‘luxury’

products, which the

schedule taxes.

Arguably the only real

revenue collected by means

of this schedule pertains to

motor vehicles.

Plastics Environment

Levy

Why is an environmental

levy only imposed on

plastic bags? Why are they

so special? I believe it is

time to include all plastics.