The Finance Minister on 26 October announced the publication of the Tax Administration Laws Amendment Bill, 2016 to (i) amend the Customs Duty Act, 2014, so as to delete certain unnecessary provisions and to combine certain provisions for purposes of clarity; (ii) amend the Customs Control Act, 2014, so as to make certain technical corrections; to delete certain unnecessary provisions; to make changes to provisions relating to the submission of cross-border train departure reports; to provide for the transmission of electricity under the international transit procedure; to broaden a rule enabling provision to include rules relating to the treatment of detained counterfeit goods in state warehouses; and generally to make adjustments for the smoother implementation of that Act, and to provide for matters connected therewith; (iii) amend the Customs and Excise Act, 1964, so as to narrow the scope of provisions relating to Special Economic Zones (SEZ) and to align terminology with terminology used in the SEZ Act, 2014; to broaden the scope of provisions relating to marking, tracking and tracing of tobacco products and to make certain changes relating to the maximum allowed weight of cigarettes for import or manufacturing; to align the prescription period for refunds to the general prescription period of three years; and to make changes to provisions relating to the payment and calculation of interest on outstanding amounts; and amend the Value-Added Tax Act, 1991, so as to amend provisions to align with the SEZ Act, 2014; to amend provisions relating to acceptable documentary proof; to reinsert a prescription period; and to amend a schedule.
2.66 Customs Duty Act, 2014: Amendment of section 95 The proposed amendment is aimed at providing for less harsh consequences to flow from a failure by a person to comply with a request by Customs to submit a worksheet or additional documents. The result of the proposed amendment will be that such a failure will not be a Category 2 offence in terms of section 95, but only a non-prosecutable breach of the Act for which an administrative penalty may be imposed.
2.67 Customs Duty Act, 2014: Amendment of section 171 The current separate provisions of sections 171 and 172 appear to overlap. The proposed amendment in effect combines sections 171 and 172, and section 172 is consequently repealed.
2.68 Customs Duty Act, 2014: Repeal of section 172 See the note on the amendment of section 171 of the Customs Duty Act, 2014.
2.69 Customs Duty Act, 2014: Amendment of section 175 The proposed amendment is consequential to the amendments proposed in relation to sections 171 and 172 of the Customs Duty Act, 2014.
2.70 Customs Control Act, 2014: Amendment of section 1 The proposed amendment is consequential to the amendments to sections 194 and 204 of the Customs Control Act, 2014.
2.71 Customs Control Act, 2014: Amendment of section 63 The proposed amendment is intended to ensure that departure information submitted in relation to a cross-border train is reliable and final when the train leaves the Republic.
2.72 Customs Control Act, 2014: Amendment of section 91 The proposed amendment is intended to align the de minimis regime in relation to import duty with the international tendency to utilise a minimum threshold in relation to the value of goods below which no duties will be collected, without restriction as to the kind of goods or the frequency of import.
2.73 Customs Control Act, 2014: Amendment of section 94 The proposed amendment is intended to facilitate the clearance process in respect of containerised goods exported from the Republic in instances where the goods are containerised at a place other than a container depot.
2.74 Customs Control Act, 2014: Amendment of section 194 The proposed amendment provides for the international transit of electricity imported from a neighbouring country through the Republic to third countries. Currently the provisions regulating the international transit of goods are too restrictive to enable such transits.
2.75 Customs Control Act, 2014: Amendment of section 204 See the notes on the amendment of section 194 of the Customs Control Act, 2014.
2.76 Customs Control Act, 2014: Amendment of section 308 The proposed amendment provides flexibility in that it allows the Commissioner to prescribe the kind of warehoused goods in relation to which regular reports have to be submitted.
2.77 Customs Control Act, 2014: Amendment of section 576 The amendment is proposed to correct an error.
2.78 Customs Control Act, 2014: Amendment of section 600 The proposed amendment enables the Commissioner to prescribe rules specifically applicable where suspected counterfeit goods which were detained by Customs are secured in terms of section 570(2) (e) in a state warehouse, pending removal of the goods to a counterfeit goods depot or termination of the detention. Suspected counterfeit goods secured in a state warehouse should not be subject to the other provisions of Chapter 27 of the Act applicable to goods removed to state warehouses, for example provisions relating to reclaiming or disposal. The amendment accordingly also provides for the exclusion of suspected counterfeit goods from provisions of the Chapter, as may be prescribed by rule, that are inappropriate for such goods. Counterfeit goods are disposed of in terms of the Counterfeit Goods Act.
2.79 Customs Control Act, 2014: Amendment of section 626 The proposed amendment is consequential to the amendment to section 626(c) effected in terms of section 123 of the Tax Administration Laws Amendment Act, 2015.
2.80 Customs Control Act, 2014: Amendment of section 687 The purpose of the proposed amendment is to correct an error.
2.81 Customs Control Act, 2014: Amendment of section 929 This amendment to section 929 is aimed at ensuring that a single system of interest calculation applies to all amounts outstanding as from the effective date, irrespective of which law must be applied to the goods. The amendment is proposed purely for purposes of legal clarity and to avoid any uncertainty as 48 to which legal regime applies to interest calculation during the transition period.
2.16 Customs and Excise Act, 1964: Amendment of section 21A
The proposed amendment aims to—
(a) align definitions and terms to that of the Special Economic Zones Act, 2014;
(b) delete reference to the value-added tax liability as it is covered in that Act and duty liability is covered by subsection (9) of this section; and
(c) clarify removals to other licensed premises and rebate manufacturers.
2.17 Customs and Excise Act, 1964: Amendment of section 35A
2.17.1 The proposed amendments facilitate South Africa’s compliance with its fiscal marker and tracking and tracing obligations under Article 8 of the Protocol to Eliminate Illicit Trade in Tobacco Products of the World Health Organisations’ Framework Convention on Tobacco Control. The proposals empower the Commissioner to prescribe by rule the necessary identification markings, and a national or regional tracking and tracing system for tobacco products. As a consequence, the current diamond stamp marking of cigarette containers will be replaced.
2.18 Customs and Excise Act, 1964: Amendment of section 54
2.18.1 See the note to the amendment of section 35A.
2.18.2 The proposed amendment applies the fiscal marker and tracking and tracing obligations in respect of imported tobacco products.
2.19 Excise Duty Act, 1964: Amendment of section 76B. The proposed amendment aligns the prescription period for refunds to the general prescription period of three years. The effect of the amendment is that the period will be the same across the customs and excise spectrum.
2.20 Excise Duty Act, 1964: Amendment of section 76C. Section 76C authorises the Commissioner to set off any amount of duty refundable to a person in terms of this Act against any amount of tax, additional tax, duty, levy, charge, interest or penalty not timeously paid by such person in terms of any other law administered by the Commissioner. The proposed amendment aims to ensure that a refund of duty will in the first instance be set off against a debt under this Act and thereafter against a debt under any other law administered by the Commissioner.
2.21 Customs and Excise Act, 1964: Amendment of section 105. In terms of section 105 of the Customs and Excise Act, 1964, interest on amounts payable in terms of the Act that are in arrears must currently be calculated monthly, whereas the new customs laws will introduce interest on arrears on daily balances owing which will be compounded at the end of each month. The purpose of the amendment to section 105 is to switch to interest calculation on arrears on daily balances as from a date earlier than the effective date for the new laws and to compound interest as from the effective date. This arrangement will apply uniformly to all customs and excise payments that are in arrears, whether they are due on imported goods or locally produced goods.
2.22 Customs and Excise Act, 1964: Amendment of section 113
2.22.1 Illicit tobacco manufacturers have been avoiding excise duties through duplicate manufacturing runs of both legal and illegal products and have avoided prosecution through the declaration of inaccurate cigarette manufacturing input to output ratios. The proposed amendment reduces the maximum allowed tobacco content of locally manufactured cigarettes to 0.9kg per 1000 to more accurately reflect volumes of tobacco inputs currently used in cigarette production. This will assist anti-illicit tobacco enforcement interventions that match tobacco inputs against declared cigarette outputs.
2.22.2 The proposed amendment also reduces the maximum allowed weight of imported cigarettes to 1.2kg per 1000 to similarly reflect the volumes of tobacco inputs currently used in the production of imported cigarettes. Anti-illicit tobacco enforcement on imported cigarettes considers the weight of the completed cigarettes and their unit packaging, hence the higher weight limitation compared to locally manufactured cigarettes.