On 17 August 2015 the South African Revenue Service (Sars) sent out an email with the subject line ‘Special Alert - Letter to customs clients re new legislation’. Just in case you have not received a copy, we decided to reproduce it. Should you wish to receive a copy, please send an email with the article title in the subject line.
So what to make of the letter? The letter is on the letterhead of the ‘Office of the CO: Legal and Policy’, and the division ‘Customs Litigation’. Can this be correct?
Before reading the letter that is copied below, remind yourself of the following:
There were four workshops held on the Draft Rules in terms of the Customs Control Act, 2014 (published on 23 July 2014 consisting of 944 sections) (i) 23 April 2015 - Draft Customs Control Rules - Chapters 32 to 41; (ii) 11 December 2014 - Chapters 21 to 23, and 25 to 31; (iii) 26 November 2014 - Chapters 11 to 20 and 24; and (iv) 29 August 2014 - Chapters 1 and 3 to 10. The last was held nearly four months ago. This accounts for 40 sections or 4.24% of the total.
There have been no workshops for the Customs Duty Act, 2014 which was published on 10 July 2014, consisting of 229 sections.
For completeness, the Customs and Excise Amendment Act, 2014 was published on 23 July 2014.
All the Acts were published more than a year ago and sections of the first two have been published for various corrections and amendments in the draft Tax Administration Laws Bills of 2014 and 2015. Could this be indicative of a rush in having the Acts published? If so, why then, when the Acts’ introduction seems to be subject to the publication of the Rules to the Act, the date of which is anyone’s guess. (You will recall that the drafting of the Customs Duty Bill and Customs Control Bill commenced in January 2005.)
It is understood that the first phase of implementation will deal with ‘Registration and Licensing’ for which Customs stakeholders would be expected to register. According to Sars’ 2013/2014 Annual Report there were 272 544 registered importers and 246 500 registered exporters, or a total of 519 044 registered importers and exporters. It is understood that the first phase is expected to go live in 2016 and is to commence before the new Acts enter force. (This only accounts for importers and exporters, and not for clients with warehouses, agents and other forms of registration.)
Since the Annual Report does not distinguish between ‘active’ and ‘registered’, if one is to assume that the 519 044 registered are single entities – not duplicated – and are ‘active’ then if one allows a year (365 days) to register all, this would mean 1 422 registrants per day. That’s if the task is undertaken for every single day – 7-days a week. (It would be interesting to know how many registrants are ‘active’.)
As a parting thought, what is your perception of the extent of the difference in position between the Sars draft rules and that of your industry? Would you consider it as ‘not substantial’?
The letter follows:
‘Office of the CO: Legal and Policy
Customs Litigation
Customs Client
Office: Pretoria
Telephone: (012) 422 5153
Facsimile: (012) 452 9882
14 August 2015
Dear Customs Client
UPDATE ON NEW CUSTOMS LEGISLATION
We are aware that many of our Customs clients are eagerly awaiting news on the implementation of the two new Customs Acts printed in the Government Gazette in July 2014.
Extensive work has been taking place around drafting the Rules to the new Customs Control Act, 2014, and Customs Control Act, 2014, with several batches of rules published for comment over the past year. We are currently finalising all comments received on both Acts and an amended version of the consolidated rules will be published for comment before the end of 2015. It is important to note that these amendments are not substantial and have been discussed in previous rules workshops with Customs stakeholders.
Sars has hosted four workshops for key stakeholders in which we addressed the Rules. All comment from Customs stakeholders on the Acts were considered and many of the suggested changes were accepted. This positive collaboration is continuing and the rest of 2015 will be used for finalising the Rules so that trade has adequate time to comment and give input. We are currently also setting a date for the next Rules workshop which we hope to have within the next few weeks to discuss comments on the Duty Act rules.
Work has already begun on specific projects, such as Registration and Licensing, Goods Reporting and Declaration Processing, which will be implemented once the new Acts go live.
The first phase of implementation, which will deal with Registration and Licensing, is expected to go live in 2016. Customs stakeholders will be given adequate time to begin the re-registration process before the new Acts go live and you will be informed timeously of the date. We also intend to engage with service providers and other affected stakeholders at the earliest opportunity.
We will soon be launching a dedicated web page on the Sars website for updates on the new Customs legislation (keep an eye on the Sars home page) and will continue to engage with public and private stakeholders throughout the process.
Thank you for your support.
Kind regards
KOSIE LOUW
CHIEF OFFICER: LEGAL AND POLICY’