Questions have been raised
following the publication of the
first set of rules for the Customs
Duty Act related to the term
“deferment benefit”.
Industry stakeholders are
questioning why the word
benefit is used in conjunction
with deferment – especially in
light of a published proposal
by the South African Revenue
Service earlier this year to
introduce a fixed deferment
period of one calendar month
to apply to all deferment
account holders.
Currently deferment account
holders make payments at
different times of the month
on agreed dates with Sars
allowing companies to stagger
their payments and control
cash flow.
Sars has however proposed
that each company should only
have one national deferment
account which will run from
the first to the last day of each
month and which will then be
payable by the 7th day of the
following month. This is also
how the matter is laid out in the
draft rules now out for public
comment.
Whilst the proposal has
been put on hold and has been
postponed following a wide
industry outcry as it would
severely affect cash flow, the
use of the word “benefit” in the
rules implies that Sars sees the
deferment accounts as exactly
that – some kind of a privilege
or benefit in the name of the
deferment account holder.
“So one has to ask if this
is something that they feel
they can take away as one can
do with a benefit?” said an
industry source FTW spoke
to. “We are of the opinion that
the world “benefit” should not
be used in this context at all.
What essentially amounts to a
similar deferment scheme is not
described as a “benefit” in the
VAT Act, and the Revised Kyoto
Convention does not refer to
“deferment of duty” in these
terms. It is a strange “benefit”
indeed that requires every
deferment account holder to
have a bank guarantee in place
guaranteeing payment not only
of the duty, but a 25% portion
of the import VAT.
“VAT vendors are not
required in terms of the VAT
Act to have any guarantees
in place for the deferment
of VAT in terms of the VAT
Act. Sars has habitually
discriminated against
importers and customs
brokers by treating imports,
and the corresponding
deferment of taxes,
differently.”
Another issue that has
cropped up in the Duty Act is
that the document only refers
to the deferment of duties and
not VAT.
“It should read “import
taxes” which includes both,
but they have given industry
a set of rules that only applies
to duties and not VAT. There
is major room for confusion
and clarity will have to be
obtained around this.”
INSERT
One has to ask if this
is something that
they feel they can
take away as one can
do with a benefit.
