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HOW
JACOBSENS CAN ASSIST SOUTH AFRICAN MANUFACTURERS TO BECOME MORE COMPETITIVE
The world
has changed dramatically since 1994 and even more so since 11 September
2001. Today, our world is much more open, but at the same time, much more
difficult. There is a growing complexity.
The
successes of WTO 1994 that transformed GATT into the World Trade
Organisation lead to trade liberalization which played a huge role in
globalization.
Within this
context governments have to make policies, strategies and instruments
supporting trade liberalization.
The term
“globalization” means that the world is much more integrated in terms of
politics, economics, social issues, trade and information communications
technology. Information Communications Technology (ICT) has had a strong
impact on trade because communications today allow consumers and producers
to be informed of what is happening in any part of the world. This leads to
more informed and more sophisticated consumers and, subsequently, more
demanding and more informed and efficient producers.
Globalization is also characterized by a greater diversity, increasing
competition, more countries competing, more companies competing and
traditional comparative advantages beginning to erode.
Governments
and companies should become more competitive on global markets.
Competitiveness relates to all the elements that relate to globalization:
Products, infrastructure, ports, information systems, management, trade
policy (technical standards, environmental regulations, etc.).
The
Department of Trade and Industry is responsible for supporting industries to
improve the competitiveness of their products and companies. Globally
Ministries of Trade and Industry also need to improve the competitiveness of
their countries.
Export
(trade) promotion is one component of (improving) global
competitiveness. Traditionally trade promotion agencies used to focus on
promotion of exports. However, in a global economy, where many industries
are globalized, trade promotion agencies need to stop distinguishing between
imports and exports and between only promoting exports and not imports
because all business activity is now integral.
Thus we
should start talking about trade promotion agencies, and not export
promotion agencies.
Ministries
of Trade and Industry also play an important role in trade policy
formulation through customs tariffs. Jacobsens as the Common External Tariff
of the Southern African Customs Union published by LexisNexis is the most
important trade policy instrument of South Africa and the BLNS-Countries,
Botswana, Lesotho, Namibia and Swaziland, and there are various provisions
in the SACU Tariff that are aimed at improving global competitiveness.
Rebate,
refund and drawback provisions are published in Schedules 3, 4 and 5 of the
SACU Tariff. The International Trade Administration Commission of South
Africa investigates certain industries and makes recommendations in reports
on the implementation of certain offerings on behalf of the Southern African
Customs Union. These recommendations are then considered by the Minister of
Trade and Industry, who requests the Minister of Finance to amend the Tariff
in line with ITAC’s recommendations.
Examples of
such offerings relating to imports and exports are:
Schedule
No. 3 provides for industrial rebates for manufacturing purposes on products
not produced in the Southern African Customs Union, allowing manufacturers
to import their intermediate material and component inputs at lower rates of
duty.
Schedule
No. 4, inter alia, provides for products for which there are temporary
shortages in the Southern African Customs Union.
The primary
aim of Schedule 3 and 4 rebate provisions is to provide import duty waiver
on products that attract duties but are not produced in the SACU or which
are insufficiently produced in the region.
These
rebates are available subject to certain conditions. In some instances one
of the conditions is a rebate permit from the International Trade
Administration Commission (ITAC). Rebate facilities need to be approved by
SARS Customs.
Import VAT
is payable on Schedule 3 rebate provisions while most Schedule 4 rebate
provisions are exempted from payment of VAT.
Rebate item
470.03 in Schedule No. 4 provides for a full waiver of customs duty on
imported goods for use in the manufacture of goods exclusively for export.
Payment of VAT is exempted. The premises of manufacturers need to be
approved and registered by SARS Customs.
Refund item
521.00 provides for a full refund of customs duty on imported goods used in
the manufacture of goods exclusively for export.
Upon
receipt of a duly completed application for rebate item 470.03 or refund
item 521.00, ITAC issues the permit. In the case of a 470.03 permit, which
must be obtained prior to importation, the permit is presented to Customs
when clearing the goods whilst the 521.00 permit must be presented to SARS
Customs when claiming a refund of the duties which have been paid at time of
importation. The application forms are available on the ITAC website
www.itac.org.za. |
