The National Treasury has called for public comment on the proposed introduction of export tax on scrap metal following finance minister Tito Mboweni’s 2020 Budget speech.
As part of the proposal, the current price preference system for scrap steel will be phased out in favour of a new system specified by the International Trade Administration Commission (Itac).
However, according to a statement by National Treasury, the implications on trade following the introduction of these taxes are still unknown. They have therefore decided to begin a two-phase consultation process with the public and industry leaders.
“The first phase will be a shorter and broader public comment process on the objective, implementation, functioning and economic and financial impact of such an export tax, including the level of rates and base for such a tax.” Treasury said.
“The first phase will be followed by a more intensive second phase of public comment on the proposed legislative provisions to give effect to specific export taxes on scrap metal, to be included in the 2020 draft Taxation Laws Amendment Bill (TLAB).”
An initial meeting with stakeholders will be held on 25 March, ahead of the first phase of discussions, with the National Treasury requesting that all written comments be submitted by no later than 9 April.
At the meeting, stakeholders will be made aware of exactly why these changes have been proposed and how much they will be taxed to export their products out of the country. Red metals topped the list at R8 426 per tonne exported, with aluminium coming in second at R3 000 per tonne. Ferrous and other waste and scrap metals, including stainless steel, will cost R1 000 per tonne exported.
The first phase of discussions will be completed at the end of April while the second phase kicks off following the publication of the Taxation Laws Amendment Bill in July. – Bjorn Vorster
