Taking Customs and Excise Compliance to New Levels

2017/18 South African National Budget Expectations

The Minister of Finance’s 2017 budget speech will have a greater than ever focus on measures designed to increase revenue collections, including collections of customs and excise duties as well as the various levies administered by SARS.

The tax authority’s strategic plan includes increased customs and excise compliance with the focus on building world class customs and excise capabilities and performance. This would be achieved by:

• Improving control over the flow of all goods and travelers entering and leaving the country.

• Identifying, assessing and responding to risks more effectively.

• Enhancing the quality of inspections and audit to accurately verify identified risk.

• Modernising and aligning excise processes and systems.

• Segmenting SARS’s customs base to support compliance through harsh consequences for repeated non-compliance.

• Developing a professional and disciplined customs and excise workforce.

• Continuing to adopt a whole-of-government approach to improve border management.

• Improving service and trade administration based on an understanding of SARS’s clients and their needs.

• Implementing the new customs and excise legal framework.

Traders continue to be frustrated by the delay in implementing the new Customs Control Act, 2014 and Customs Duty Act, 2014. A rewrite of the current excise duty legislation will start in 2017/2018 and is expected to take two to three years to complete at which point a new Excise Duty Act will be promulgated.

The Customs Control Act and Customs Duty Act will be implemented in phases. Registration, licensing and accreditation should be ready for implementation by 31 March 2017. Reporting of conveyancing and goods is scheduled for implementation by 31 December 2018, and declaration processing should be ready for implementation by 31 March 2018.

Projected customs duty collections for the 2016/2017 fiscal year are R51.9billion and are anticipated to grow to some R57.2billion for the 2017/2018 year, although the projected growth cannot all be attributed to the impact of the new legislation.

Traders should already be familiar with the new legislation and have developed an implementation plan to take into account the key requirements of the new law. These include new terminology, import clearance periods being reduced from 7 to 3 days, a new administrative penalty regime, a formal voluntary disclosure process, extension of the general prescription period from 2 to 3 years and provision for the issuance of advance binding rulings by the SARS.

How can Deloitte help:

Effective management of global trade decisions and obligations is an important – and sometimes overlooked – factor in a company’s global supply chain. Crucial to a multinational groups success today is the efficient integration of customs and international trade processes into its overall business goals, tax and supply chain management. Deloitte's global network of customs and global trade specialists help businesses meet their legal and regulatory requirements in a cost-effective manner. Our services include:

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