New AU scheme could cream R2bn off SA importers

Given the sketchy figures available,
a new means of raising the funds
for the African Union (AU),
exclusively from member countries,
could see SA importers having to
fork out an extra R2 billion.
The new scheme, due to kick off
next year, has been devised so that
the then purely African-funded
AU would escape
the current situation
where outside donors
can interfere in its
decisions or lay down
conditions to the body.
The proposal is that
each member country
should contribute
0.2% of the tax it collects from
imported goods.
According to the AU, its
annual running budget is the
equivalent of R7.07 billion, with
another R10.6bn for peacekeeping
functions. But, of this total of
R17.67bn, about 72% (R12.7bn)
currently comes from outside
sources like the EU, US, China,
Turkey and the World Bank.
Now, if the department of trade
and industry’s Lionel October
is correct, what he calculates as
SA’s contribution under the new
scheme would be about R2bn.
That would leave the other 53
AU member countries having to
find R15.67bn – or an average of
over R295 million each.
But the question amongst those
in the freight and trade industry
is where the government is going
to recover this extra
couple of billion –
since it is always
loathe to lose any tax
monies.
It was pointed out to
FTW that it couldn’t
come from additional
import duties or
value-added tax (VAT) – as this
would effectively push up not just
government tax income, but also
that dreaded AU contribution. An
arithmetic Catch 22.
The consensus was that it was
likely that government would
indulge in a bit of “tweaking” here
and there (even port charges was
mentioned). But whatever, all our
contacts said, it’ll be the cargo
owners who fork out in the end.
INSERT
0.2% The percentage of tax from
imports that each country
will contribute.