New export requirements create mountain of admin

ALAN PEAT
THE NEW regulations in customs’ VAT – Interpretation Note 30 are a theoretical dream, but a nightmare in practice, according to Gavin Cooper, MD of Seair Freight and director of the Cape chapter of the SA Association of Freight Forwarders (SAAFF).
A primary demand here is that the exporter must provide to SA Revenue Service (SARS) documentary proof for exports of movable goods.
SARS recently withdrew VAT Practice Note 2 of November 13, 1998 and all rulings made under that practice note, which dealt with the requirements and documentary evidence required for the zero-rating of exported goods.
This has been replaced by Interpretation Note 30 of March 31, 2005 – which raises additional administrative requirements on all exporters, and lays out the documentary proofs that must be obtained and kept by the exporter for five years whenever exported goods are supplied at the zero-rate.
But it’s proving a difficult requirement, according to Cooper.
“These are tough new regulations,” he told FTW, “and how, for example, can we as forwarders or exporters be expected to obtain an import bill of entry (BoE) if the buyer does not want to co-operate.
”Imagine exporting to Africa and trying to get an import bill of entry!”
Proof of payment will be another major problem.
“In summary,” Cooper added, “this has serious implications for all exporters and we as their forwarding and clearing agents will be sucked into additional work for our clients.
Latest information to hand, he told FTW, is that SARS’ legal team has been inundated with complaints that this proposal is absolutely unworkable and they held a meeting at short notice on May 16 to reconsider the proposal.
”However,” Cooper said, “they only anticipate an announcement ‘weeks’ thereafter – which leaves exporters in a technically vulnerable position until such an announcement is made withdrawing the requirement for an import BoE in country of destination.
“All of the documentary requirements are mandatory,” said Cooper.
“No exceptions are permitted. Where proof of payment for goods is not received within three months of export, extensions must be applied for in writing or the VAT brought to account.”