New Customs acts pose major licensing dilemma

The South African Revenue Service (Sars) will have to process a minimum of 1500 licence applications per day for a year if it wants to re-register all of its existing licence holders. Concerns and a fair amount of confusion over the impact of the three new customs acts on business has been catapulted to the forefront again following the distribution of a letter from Sars in August stating that the first phase of implementation dealing with this registration and licensing is expected to go live in early 2016. Analysts have told FTW that this is a crucial part of the process, requiring accurate timing or businesses could find themselves unlicensed, unregistered, and unable to transact. “All companies or people wanting to import or export will have to register with Sars within 30 days of the new legislation being implemented, as set out in the customs control act,” an analyst told FTW. “It is a major concern and involves all current companies and people registered or licensed with Sars. They will have to, within 30 days, re-register an application to allow for ongoing trade. Any new applications will also have to be submitted within the 30-day period.” He said taking only the current registered stakeholders into consideration that would mean Sars would have to process a minimum of 1500 applications a day for a year to register all, which is not feasible. “Currently it takes about six weeks to get a single application processed, and that includes one to three physical visits to the Sars office, with any such application being rejected one to three times and usually for reasons extraneous to the application.” Another concern is that the new legislation makes no provision for manual applications. “It clearly states that it all has to take place electronically either via EDI or e-filing. The letter in August states they are planning to do all of this in early 2016. It is therefore a major concern because there are big question marks around how exactly it is going to happen.” Sars, however, is not necessarily bound to the 30-day deadline to issue the new licences or registrations. In fact it is understood there is no time limit within which Sars is obliged to process the registration and licence applications. And, said another analyst, this excludes the host of other new licence applications required in terms of the new legislation. The exact impact of this on exporting and importing – whether old licences will remain in place until such time as new licences are re-issued – is not known. “That in itself is a problem,” said one customs expert FTW spoke to. “There is major confusion over what licences will be applicable, until when, and how the old hand-over to the new is going to happen. The thing is if your old licence is not valid under the new legislation and your new licence is not issued yet then you are not in a position to trade. And there is no given time frame for the issuing of new licences.” Sars, however, maintains it is ready and able to implement the new process as work has already begun on specific projects such as registration and licensing. In the letter to industry it clearly states it will engage with service providers and other affected stakeholders at the earliest opportunity, explaining all relevant issues and concerns. A spokesman for the Cape’s Port Liaison Forum told FTW that industry’s concerns were not unfounded – especially since the commentary on the rules and regulations process was not even close to completion. “Commentary has only been provided on the first set of rules guiding the customs duty act, with possibly at least another three sets outstanding. The entire excise amendment act’s rules have still to be commented on. We have also not seen a complete redraft of the rules for the customs control act and so there is no clear indication of which comments have been accepted and which not.” According to Sars, many of the suggested changes by industry were accepted. “The rest of 2015 will be used to finalise the rules so that trade has adequate time to comment and give input. We are also currently setting a date for the next rules workshop to discuss the comments on the duty act rules.” Industry, however, has said once all the rules have been commented on they want to see the redrafted version in its entirety prior to the implementation of the acts.