Customs

On 19 August the South African Revenue Service (SARS) released two letters, the first on the “Payment deferment extension periods: Excise Duty”, and the second “Further Tax Relief Measures to Combat Covid-19 Pandemic Effects”.

The letters notify SARS Excise Alcohol and Tobacco Licensees about the latest payment deferment extension periods due to restrictions on the sale of these products under the Covid-19 lockdown: (i) Wine and Spirits, and (ii) Beer and Tobacco.

The first letter reads:

Wine, Vermouth, Other Fermented Beverages and Spirits

90-Day Payment Deferral – August and September 2020 Excise Duty Payments

Dear Licensee

Due to the restrictions on the domestic sale of alcoholic beverages, payments due in August 2020 and September 2020 will be deferred by 90 days without interest or penalties for excise-compliant businesses. This is expected to provide short-term assistance to a significant number of businesses that are under pressure in terms of cash flow and their ability to honour payments to SARS.

For non-compliant clients, the normal payment due date as published on the SARS website will apply.

Submission of excise accounts:

All submission dates remain the same, only the payment date will be deferred for payments due in August 2020 and September 2020. The excise EXD01 submission process remains the same.

Payment of excise accounts:

As stated above only payments that are due in August and September are deferred by 90 days. This will have the effect of two payments in November and December, the deferred payment as well as the normal October and November payments.

It is important to note that it is not the intention that the May and June payments, which were deferred to August and September, receive a further 90-day deferral. These payments remain due in August and September 2020.

Wine, vermouth, other fermented beverages and spirits licensees fall into one of the following payment categories depending on the product:

• Spirits
  • 100% in 30 days
  • 100% in 110 Days
  • 100% in 130 Days
• Wine, Vermouth & Other Fermented Beverages
  • 100% from July to December in 45 Days

Payment due dates for tax-compliant clients for August 2020 and September 2020 are as follows:

Spirits:

Wine/Vermouth/Other Fermented Beverages

Further Tax Relief Measures To Combat Covid-19 Pandemic Effects

Due to the restrictions on the sale of alcoholic beverages and tobacco products, the National Treasury has announced the additional tax relief set out in paragraphs A and B below in respect of excise-compliant businesses.

A. Traditional African Beer and Malt beer

The aim of the relief is to defer the payment of excise duties due in August 2020 and September 2020 for a period of 90 days without interest or penalties.

For non-compliant clients, the normal payment due date as published on the SARS website will apply.

Submission of excise accounts:

The submission dates for traditional African beer and malt beer remain the same. The excise EXD01 submission process remains the same.

Payment of excise accounts:

Only payments due in August 2020 and September 2020 are deferred for 90 days. Please note that payments originally due in May 2020 and June 2020, which were deferred under the tax relief originally offered, will not receive a further 90-day deferral and remain payable in August and September.

Traditional African beer and malt beer licensees fall into one of the following payment categories:

• Traditional African beer
  • 100% in 30 days
• Malt beer
  •  Payment 1: 50% in 30 days and 100% in February
  • Payment 2: 50% in 60 days and 100% in February

The following excise account payments qualify for the 90-day payment deferment:

Traditional African Beer

Malt Beer

B. TOBACCO PRODUCTS

The aim of the relief is to extend the original 90-day deferral period granted in respect of payments due in May 2020 and June 2020 to a period of 150 days, without interest or penalties. This means that an additional 60 days are added to the initial 90-day relief period granted.

Submission of excise accounts:

The submission dates for tobacco products remain the same. The excise EXD01 submission process remains the same.

Payment of excise accounts:

Only payments that were due in May 2020 and June 2020 are now deferred for 150 days instead of the original 90 days granted under the initial tax relief measure.

Tobacco products licensees fall into the following payment category:

o Tobacco - 100% in 60 days

The following tobacco products excise payments qualify for the 150-day payment deferment (i.e. the 60 days additional to the initial 90-day payment deferment period)

Tobacco

Sincerely

EXECUTIVE: EXCISE

The Letter is accessible at:

https://www.sars.gov.za/AllDocs/Documents/customsandexcise/Wine%20Spirits%20-%2090%20Day%20Payment%20Deferal%20AugSept%20Final%2020200819v1.pdf

https://www.sars.gov.za/AllDocs/Documents/customsandexcise/Malt%20and%20TAB%20-%20further%2090%20day%20payment%20deferment%20-%20Tobacco%2090%20to%20150.pdf

Story by: Riaan de Lange