On 13 December 2019, the South African Revenue Service’s (SARS) Customs & Excise Operational Centre of Excellence informed in its letter titled “Calculation of VAT on Goods Imported from BLNS Countries”, that on 01 February 2020 it will implement technical system enhancements relating to the calculation of Value-added Tax (VAT) on goods imported for home use from Botswana, Lesotho, Namibia and Swaziland (BLNS countries).
The system relates specifically the legal provisions of Section 13(2) of the VAT Act, of 1991 and Rule 120A.02(a) to the Customs and Excise Act, 1964.
Section 13(2)(a) states that where the origin of such goods is from non-BLNS countries, the goods are subject to an upliftment of the VAT value by a factor of 10%, in the calculation of VAT payable at the time of clearance into South Africa. This implies a mark-up of the Customs value by 10%, upon which VAT of 15% is calculated.
The letter cites an example of how VAT is calculated:
SARS points out that no mark-up is applied on the importation of goods originating in BLNS countries and cleared for home consumption. Only VAT of 15% is calculated on the customs value.
SARS reminds importers, registered agents and clearing agents of their obligation to comply with the above-mentioned legal provisions.
Story by: Riaan de Lange