Finance option adds
bottom-line benefits
A NEW scheme which enables companies to bank their customs duty drawback refunds on the date on which the claim has been submitted has just been launched.
An innovative new product from Deloitte & Touche Trade & Investment Solutions (TIS) in conjunction with Corpcapital Bank, it offers exporters a hassle-free, outsourced solution which provides positive, bottom-line benefits, TIS project manager Jed Michaletos told FTW.
Customs duty paid on imported products or components in South Africa which are then used in the manufacture of a product for export can be claimed back from the South African Revenue Service (SARS) when the goods leave the country.
But it's a facility that is not used to its full potential for several reasons, says Michaletos. "People either don't know about it, or they find it too time-consuming, or they process the drawback claim and find themselves waiting 12 - 24 months before they get any money back."
TIS has put together a specialist project team to provide an outsourced solution for the entire process, but with the added value alternative financing option.
"We'll calculate and compile the claim, do all the paperwork, submit the claim and pay the client on the day we submit the claim," says Michaletos.
"It's the immediate access to the drawback funds through Corpcapital which makes the scheme unique," says Corpcapital project manager Mike Honiball.
"A number of companies are able to offer the traditional outsourced solution for drawback claims, but the association with Corpcapital, which offers immediate access to the customs duty refund, improves clients' liquidity and provides a huge cash injection," says Honiball.
The scheme is designed for medium to large companies, enabling them to offset their import costs quickly and improve margins in the process.
"We will discount the value of the company's drawback claim and pay it to them on the day of submission," says Honiball.
The scheme is also ideal for companies which import goods, distribute those goods to another company which processes them for export. Here TIS can act as mediator and process the claim on behalf of both companies which can then share in the benefits.
It is estimated that the country's drawback duties amount to some R1-billion a year. "We believe that we have the expertise and the contacts to ensure that companies claim back what is their rightful due." said Michaletos.
