Manuel raises hopes of zero-rating solution

ALAN PEAT THERE ARE distinct hopes that one of the changes suggested by finance minister Trevor Manuel’s budget will bring an end to the contentious issue of last year’s SA Revenue Service (Sars) “interpretation note number 30” on exports which are zero-rated for value added tax (VAT). The big question that was bandied around in the forwarding industry the instant the draft of the new note was published was: How it is possible to get import bills of entry from destination countries – especially those in the African continent – so that you get your zero-rating? Following meetings between the SA Association of Freight Forwarders (Saaff), customs, and members of Sars’ VAT legal team, Saaff chairman Philip Womersley said that it could be accepted that there was no need for exporters to have proof of clearance from foreign buyers until the whole matter of the interpretation note was sorted out. And that could very well be on its way, from what minister Manuel had to say. His budget stated that vendors receive zero-rated treatment for exports only upon documentary proof acceptable to the commissioner of customs and excise. But, it added, this requirement was to be upgraded to permit the commissioner to prescribe the documentary proof. And the hope is that what he comes up with will not include the demand for import bills of entry from destination countries – a demand that industry executives described as “impossible” to fulfil.