Oil and gas sector pins hopes on Sars amendment

Large provisional payments and deposits that are due to customs for the import of temporary cargo destined to service the oil and gas sector are severely inhibiting growth in the sector. But an expected amendment to the Sars tariff, which has been welcomed by the Cape Town Port Liaison Forum, will hopefully address this issue. There are rebates in place for companies importing temporary cargo for the oil and gas ship repair industry which suspend all duties and VAT pending their total compliance. But in the interim customs requires deposits to cover any possible duty and VAT on the imports which amounts to a contradiction in terms, according to a spokesman for the forum. “It restricts business significantly and inhibits growth of an industry that the Western Cape has clearly identified as a sector that can benefit the local economy hugely,” the spokesman said. The forum, as well as industry role-players, have been working closely with customs officials in an effort to find a solution to the problem. “We have been discussing the possibility of a new rebate item in the tariff book that will address this issue, but that will take some time before it takes effect,” the spokesman told FTW. “For temporary imports a lot of security is usually involved, and because of the very nature of the equipment used in the oil and gas industry, it is expensive and therefore the deposits are large sums of money.” It is expected that the South African Oil and Gas Alliance (SAOGA) will host a workshop later this month in an effort to unpack this issue and take the matter forward with customs.