Legal and Policy - 21 November 2024

SARS

15 November 2024 – Customs and Excise Act, 1964: The rule amendments notice, scheduled for publication in the Government Gazette, relates to the storage of imported bonded fuel goods in special customs and excise storage warehouses (DAR259)

Publication details will be made available upon promulgation in the Government Gazette.

15 November 2024 – The latest VAT Connect newsletter for November 2024 is now available.

15 November 2024 – The Commissioner for South African Revenue Service (SARS), Mr. Edward Kieswetter was appointed as Vice Chairperson of the OECD Forum on Tax Administration. The announcement was made during the 17th FTA Plenary held in Athens Greece from 13-15 November 2024. Commissioner Kieswetter joins Mr. Bob Hamilton, Commissioner of the Canadian Revenue Agency and Chairperson of the FTA, and Ms. Nina Schanke Funnemark, the Director General of the Norwegian Tax Administration and fellow Vice Chair of the FTA. A diverse Bureau^[1] joins the Chair and Vice Chairpersons in setting the direction of the FTA work for the coming two years. The elevation of Commissioner Kieswetter puts South Africa in a strategic role within the OECD Forum on Tax Administration (FTA) to influence the Bureau to serve the interests of developing countries.

On his appointment, Commissioner Kieswetter emphasized the importance of South Africa’s participation in the international tax dialogue: “SARS has been steadfast in the achievement of its strategic intent to develop and administer a tax and customs system premised on voluntary compliance, and where appropriate, enforce responsibility and decisively. SARS’s strategic intent is supported by nine strategic objectives. Strategic Objective 8 is to “Work with and through stakeholders to improve the tax ecosystem”. Commissioner Kieswetter further elaborated: “Our participation in international forums underscores the importance of effective and beneficial partnerships, including with the likes of the FTA. Tax risks are not confined within national borders. A tax risk anywhere in the world, is a tax risk everywhere. No country is a fiscal Island. SARS can only be efficient and effective if we maintain solid international networks and partnerships which enable cross-border tax cooperation and improve voluntary tax compliance. This contributes to our vision of building a smart modern tax administration that can be trusted and admired and our participation in the FTA, the pre-eminent forum on tax administration, is essential to making our vision a reality.”

The FTA was established in 2002 and currently brings together tax commissioners and tax administration officials from over 50 countries. The FTA is unique in that it is the only Head of Tax Administration-level Forum that harnesses the collective expertise and experience of its members to share knowledge, undertake research of common interest and develop new ideas and approaches to enhance tax administration around the world through thought leadership, knowledge-sharing of best practices and the development of new practical tools.

The Athens Plenary convened under the theme of “The transformation of tax administration”. “The transformation of tax administration is becoming ever more crucial in the pursuit of enhanced domestic resource mobilisation (DRM) and achieving the United Nations Sustainable Development Goals (SDGs). Specifically, effective DRM through taxation is essential for financing public investments in infrastructure, education, and healthcare, which are fundamental to achieving the SDGs. Taxation serves as a sustainable and predictable source of public finance, particularly in developing countries”, said Commissioner Kieswetter in his opening presentation to the Plenary.

Delegates to the Athens Plenary engaged in robust discussions on key burning tax administration issues including, amongst others, transformation of tax administrations, leadership challenges and opportunities, digital transformation to help realise more seamless and closer to real-time taxation processes, tax certainty, the implementation of the Global Minimum Tax and tax administration capacity building. The Plenary also saw the launch of the FTA’s Gender Balance Maturity Model.

Upon reflecting on the Forum’s three-day plenary discussions, Commissioner Kieswetter stated “We live in an increasingly complex world within which tax administrations must deliver its mandate of domestic resource mobilisation. We are witnessing a proliferation of tax and financial crime that not only creates significant revenue leakages but also erodes social cohesion. We remain committed to building a smart modern tax and customs administration. Without a well-functioning SARS, our democracy would be unfunded”

Link: FTA Plenary 2024 – Statement of Outcomes

^[1] FTA Bureau 2024: Argentina, Australia, Brazil, Canada, Chile, France, Greece, Japan, Netherlands, Norway, People’s Republic of China, Singapore, South Africa, Sweden, United Kingdom, United States

18 November 2024 – The state provides state warehouses for the safekeeping of goods. These are managed by Customs. The purpose of this list of unentered goods is to notify the importer, exporter and any other person that has interest in the goods that the goods have been taken up into the State warehouse and if they remain unentered they will be disposed in accordance with the provisions of the Customs & Excise Act.

See the latest Customs Weekly List of Unentered Goods here.

18 November 2024 – Customs and Excise Act, 1964

· CSARS v Diageo SA (Pty) Ltd (1063/2023) [2024] ZASCA 158 (15 November 2024)

Customs and Excise Act 91 of 1964 – Interpretation – classification of beverages under tariff headings – Tariff Heading 2208.470.22 (and corresponding Tariff Item 104.23.21) – liqueur with wine spirit base to which non-alcoholic ingredients are added – meaning of ‘non-alcoholic ingredient’ in Additional Note 4 to Chapter 2 of Schedule 1 to the Act – Additional Note 4 (including 4(b)) to Chapter 22 of Schedule 1 Part 1 of the Act – whether an alcohol by volume content of less than 0.5% to be construed as ‘non-alcoholic’ – applicability of other statutes, South African Revenue Service (SARS) Policy and the principle of de minimis non-curat lex in giving such meaning.

· 18 November 2024 – Income Tax Act, 1962

· BPR 413 – Application of proviso to section 8EA(3)

18 November 2024 – Customs and Excise Act, 1964

· Part 1 of Schedule No. 1 – Deletion and insertion of various tariff subheadings as well as the insertion of Additional Note 1 under Chapter 44 to provide for technical amendments for statistical purpose

Due date for comment: 2 December 2024

18 November 2024 – Customs and Excise Act, 1964: The tariff amendments notices, scheduled for publication in the Government Gazette, relate to the amendments to –

· Part 2 of Schedule No. 5, by the substitution of Notes 1(a) and 1(d) to refund item 522.07 to add the reference to “licenced marine remover” and to provide for the Controller to exercise a discretion on the goods to be sealed under supervision by an officer in order to facilitate the refunding of duties paid upon removal of “bonded fuel goods”; and

· Part 4 of Schedule No. 5, by the substitution of Notes 1(a) and 1(d) to drawback item 541.01 to add the reference to “licenced marine remover” and to provide for the Controller to exercise a discretion on the goods to be sealed under supervision by an officer in order to facilitate the refunding of duties paid upon removal of “bonded fuel goods”.

Publication details will be made available later

19 November 2024 – The South African Revenue Service (SARS) seeks to update the total figures for tax directives received concerning withdrawals from the Savings Withdrawal Benefit under the two-pot system. Since its inception, SARS has observed an unprecedented and steady increase in tax directive applications, likely reflecting the economic challenges faced by households.

As of 18 November 2024, 2,153,942 directive applications were received and a total of 1,914, 306 directives issued with a total gross value of R49 577, 355, 406.14.

The difference between directive applications and directive issued is accounted for in the following manner:

· 169 509 applications were declined for a myriad of reasons, ranging from systems failures from the fund management entities to wrong identification number, wrong tax number etc.

· 41 523 directives were declined because of insufficient funds, wrong codes etc.

· 28 525 directives were cancelled by taxpayers who changed their minds.

In line with SARS’ intent for taxpayers to use digital channels, SARS is pleased to announce that the simulated WhatsApp calculator was used 53,693 times since implementation of the process. The simulated calculator on the SARS website, which forms part of the SARS Online Query System, has been used 850 375 times. SARS has also received 102 839 queries through the voice channel, and 17 627 at branches. The USSD channel received a further 66 048. SARS remains committed as per the principles and values embodied in our strategic objectives, which is to provide taxpayers with clarity and certainty on their tax matters and to make it easy and seamless for them to comply. In this regard, taxpayers are encouraged to continue to use the digital channels, which are simple, easy and user-friendly. Using these channels means taxpayers do not have to leave their homes or places of employment to stand in undignified queues.

The work that has been accomplished so far by SARS is in large measure because of good cooperation with retirement fund management entities. SARS wishes to thank these institutions who play a critical role in the tax ecosystem for their professionalism that has allowed SARS to play its part in efficiently and speedily issuing required tax directives.

Commissioner Edward Kieswetter cautioned taxpayers to avoid any actions that could constitute criminality and emphasized the importance of using the correct identity and tax numbers when applying for this benefit. SARS encourages voluntary compliance and, in this regard, offers a range of communication options on the SARS website to achieve this objective.

For more information, please contact SARS at SARSMedia@sars.gov.za.