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SOUTH
AFRICAN CUSTOMS TARIFF MATTERS
Customs duties on goods imported into the Southern
African Customs Union (SACU) are levied in terms of Schedule No. 1
Part 1 to the Customs and Excise Act 91 of 1964 which is reproduced
in the Jacobsens Harmonized Customs
Tariff. ITAC and the national
bodies referred to in the 2002 SACU Agreement is responsible for
setting the duty rates which are levied in terms of SACU’s
commitments under trade agreements such as the World Trade Organisation (WTO) Agreement, the SA/EU Trade
Development and Co-operation Agreement (TDCA), the SADC Trade Treaty
and the SACU-EFTA Free Trade Agreement.
SACU’s policy of protectionism has changed
dramatically on 1 January 1995 when the WTO Agreement entered into
force. Until 1 January 1995
there were many notices to amend the customs duty rates. With effect
from 1 January 1995 the number of notices were
reduced dramatically and notices to amend the tariff rates were
published towards the end of the year with the effective date of 1
January the next year to implement the commitments of SACU.
Although there has been a shift in policy, the aim
of the Tariff is still to grow the domestic industry in the face of
competition from abroad. However, the rates of duty have been reduced
dramatically since the 1 January 1995.
Since 2003 the International Trade Administration
Commission (ITAC) is responsible for investigating customs duty
rates. The Commission is a statutory body that investigates
applications for the amendment of the customs duty rates. Upon
conclusion of the investigation, ITAC makes recommendations to the
Minister of Trade and Industry in Reports. The Minister then requests
the Minister of Finance to amend the customs duty rates, and SARS
arranges for the publication of these notices in the Government Gazettes.
ITAC must take WTO bound rates and offerings in
terms of trade agreements into account when they investigate and make
recommendations in respect of requested customs duty rates.
Although certain industries (such as the
agricultural industry, the petroleum industry, the motor vehicle
industry and the textile and clothing industry) enjoy protection and high
rates of duty, the customs tariff rates are not as high as it appears
if one studies Part 1 of Schedule No. 1 of the SACU Tariff. Rebates,
refunds and drawbacks of customs duties which are listed in Schedule
Nos. 3 to 5 to the Customs and Excise Act reduce the reflected rates
of duty dramatically and customs duties collected as a percentage of
total imports, and the average tariff rates are much lower than those
reflected in Part 1 of Schedule No. 1.
Specific and ad
valorem excise duties and environmental levies and fuel and road
accident fund levies are listed in other parts of Schedule No. 1
(Parts 2A, 2B, 3 A to D and 5A and B).
Anti-dumping duty, counter vailing and safeguard
duties are listed in Parts 1 to 3 of Schedule No. 2 to the Customs
and Excise Act.
When the Customs Duty Act enters into force the
Act will be amended by the addition of a new Customs Tariff. It is
expected to be around June/July 2015.
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The
International Trade Administration Commission (ITAC) is responsible for
tariff investigations, amendments, and trade remedies in South Africa
and on behalf of SACU.
Tariff
investigations include: Increases in the customs duty rates
in Schedule No. 1 Part 1 of Jacobsens. These applications apply
to all the SACU Countries, and, if amended, thus have the potential
to affect the import duty rates in Botswana, Lesotho, Namibia,
Swaziland and South Africa.
Reductions
in the customs duty rates in Schedule No. 1 Part 1. These
applications apply to all the SACU Countries, and, if amended, thus
have the potential to affect the import duty rates in Botswana,
Lesotho, Namibia, Swaziland and South Africa.
Rebates
of duty on products, available in the Southern African Customs Union
(SACU), for use in the manufacture of goods, as published in Schedule
No. 3 Part 1, and in Schedule No. 4 of Jacobsens. Schedule No. 3 Part
1 and Schedule No. 4, are identical in all the SACU Countries.
Rebates
of duty on inputs used in the manufacture of goods for export, as
published in Schedule No. 3 Part 2 and in item 470.00. These
provisions apply to all the SACU Countries.
Refunds
of duties and drawbacks of duties as provided for in Schedule No. 5.
These provisions are identical in the all the SACU Countries.
Trade
remedies include: Anti-dumping duties (in Schedule No. 2 Part 1 of Jacobsens),
countervailing duties to counteract subsidisation in foreign
countries (in Schedule No. 2 Part 2), and safeguard duties (Schedule
No. 2 Part 3), which are imposed as measures when a surge of imports
is threatening to overwhelm a domestic producer, in accordance with
domestic law and regulations and consistent with WTO rules.
Dumping is defined as a
situation where imported goods are being sold at prices lower than in
the country of origin, and also causing financial injury to domestic
producers of such goods. In other words, there should be a demonstrated
causal link between the dumping and the injury experienced.
To
remedy such unfair pricing, ITAC may, at times, recommend the
imposition of substantial duties on imports or duties that are
equivalent to the dumping margin (or to the margin of injury, if this
margin is lower).
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Countervailing
investigations are conducted to determine whether to
impose countervailing duties to protect a domestic industry
against the unfair trade practice of proven subsidised imports from
foreign competitors that cause material injury to a domestic
producer.
Safeguard
measures, can be introduced to protect a domestic industry against
unforeseen and overwhelming foreign competition and not necessarily
against unfair trade, like the previous two instruments.
In the
WTO system, a member may take a safeguard action, which is,
restricting imports temporarily in the face of a sustained increase
in imports that is causing serious injury to the domestic producer of
like products. Safeguard measures are universally applied to all
countries, unlike anti-dumping and countervailing duties that are
aimed at a specific firm or country.
Schedule
No. 2 is identical in all the SACU Countries.
The International Trade Administration Commission (ITAC)
published a notice to exclude mirrors made from glass coloured
throughout the mass (tinted glass) from existing anti-dumping duties
applicable on unframed glass mirrors originating in or imported from
China.
Comments are due by 5 December 2014.
Download the notice (Government Notice
No. R. 1051 of 2014) from http://www.gov.za/sites/www.gov.za/files/38215_gen1051.pdf.
THE SACU 2015 TARIFF AMENDMENTS
The amendments to the Customs Tariff for the year 2015 were
published on the 28 November 2014 in Government Gazette 38240
under Government Notice Nos. R. 924 to R. 936.
The EFTA rates of duty on a wide range of commodities will
be reduced with effect from 1 January 2015.
In addition, there will also be technical amendments and the
insertion of additional 8-digit tariff subheadings for goods
classifiable in Chapters 2, 4, 15, 30, 32, 33, 38, 39, 70 and 85 and
in Schedule No. 2 with effect from 1 January 2015. (See the
section below for more information).
Subscribers will be advised as and when the updates are
published.
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With the
exception of certain parts of Schedule No. 1, such as Schedule No. 1
Part 2 (excise duties), Schedule No. 1 Part 3 (environmental levies) Schedule
No. 1 Part 5 (fuel and road accident fund levies), the other parts of
the tariff is amended by SARS based on recommendations made by ITAC
resulting from the investigations relating to Customs Tariff
Applications received by them. The ITAC then investigates and makes
recommendations to the Minister of Trade and Industry, who requests
the Minister of Finance to amend the Tariff in line with the ITAC’s
recommendations. SARS is responsible for drafting the notices to
amend the tariff, as well as for arranging for the publication of the
notices in Government Gazettes.
During
the annual budget speech by the Minister of Finance in February, it
was determined that parts of the tariff that are not amended resulting
from ITAC recommendations, must be amended through proposals that are
tabled by the Minister of Finance.
Once a
year big tariff amendments are published by SARS, which is in line
with the commitments of South Africa and SACU under international trade
agreements. Under these amendments, which
are either published in November or early in December, the import
duties on goods are reduced under South Africa’s international trade
commitments under existing trade agreements.
There were
a number of tariff amendments released on 24 November 2014. It should
however be noted that the amendments will only be effective from 1
December 2014.
The tariff
amendments dealt with the following:
The tariff
subheading on certain plastic bags in Part 1 of Schedule No. 1 is
amended to include thermoplastic materials under the compulsory
specifications for plastic bags and flat bags as recommended by the
National Regulator of Compulsory Specifications (VC 8087/2013).
See below,
all information relating to these tariff amendments:
- Government Notice No. R.
922 of 24 November 2014 is effective
from 1 December 2014 up to and including 31 December 2014
only.
- Additional Note 3 to Chapter 39
was amended through Government Gazette 38240 on
28 November 2014 and with effect from 1 December 2014.
- The new tariff subheadings was
amended again through Government Gazette 38240 dated
28 November 2014 to reflect the EFTA rates that will come
into effect on 1 January 2015. (See Government Notice R. 924
dated 28 November 2014 (1/1/1501) with effect from 1
January 2015) (Government Gazette 38240 dated
28 November 2014).
- The deletion of tariff
subheadings 3923.21.05, 3923.21.15, 3923.29.05 and 3923.29.15.
(See Government Notice R.922 dated 24 November 2014(1/1/1506) with
effect from 1 December 2014 up to and including 31
December 2015) (Government Gazette 38239 of 24
November 2014).
- The insertion of the tariff
subheadings 3923.21.07, 3923.21.17, 3923.29.40 and 3923.29.50.
(See Government Notice R. 922 dated 24 November 2014(1/1/1506) with
effect from
1 December 2014 up to and including
31 December 2015) (Government Gazette 38239 of 24
November 2014).
- The deletion of the following
items relating to environmental levies: 147.01.01/3923.21.05,
147.01.03/39.21.15, 147.01.05/3923.29.05, and 147.01.07/3923.29.15.
(See Government Notice R. 923 dated 24 November 2014(1/3A/18) with
effect from 1 December 2014) (Government Gazette
38239 of 24 November 2014).
- The insertion of the following
items relating to environmental levies: 147.01.01/3923.21.07,
147.01.03/3923.21.17, 147.01.05/3923.29.40 and
147.01.07/3923.29.50. (See Government Notice R. 923 dated 24
November 2014(1/3A/18) with effect from 1 December 2014) (Government
Gazette 38239 of 24 November 2014).
- Part 3A of Schedule No. 1 has
also been amended to reflect the changed tariff subheadings
referred above to include thermoplastic materials under
compulsory specifications for plastic bags and flat bags as
recommended by the National Regulator of Compulsory
Specifications (VC 8087/2013).
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- Part 1 of Schedule No. 1 is
amended by a reduction in the EFTA rate of duty on certain
plastic bags classifiable in tariff subheadings 3923.21.07,
3923.21.17, 3923.29.40 and 3923.29.50 from “1,9%” to “free” in
terms of the EFTA Trade Agreement (See Government Notice No. R.
924 dated 28 November 2014 (1/1/1501) with effect from 1
January 2015) (Government Gazette 38240 dated 28
November 2014).
- Amendment of Additional Note 3
to Chapter 39 to include the newly inserted tariff subheadings
published in Government Notice R. 922 (Government Gazette 38239 of
24 November 2014) (See Notice No. R.925 dated 28 November 2014
(1/1/1502) with effect from 1 December
2014)
(Government Gazette 38240 dated 28 November 2014).
- Separate 8-digit tariff
subheadings have been created for goods classifiable under
tariff subheading 0207.14 (See Government Notice No. R. 926
dated 28 November 2014 (1/1/1503) with effect from 1
February 2015) (Government Gazette 38240 dated 28
November 2014).
- Various technical amendments have
been implemented and the EFTA rates of duty have been phased
down (See Government Notice No. R. 927 dated 28 November 2014
(1/1/1504) with effect from 1 January 2015)
(Government Gazette 38240 dated 28 November 2014).
- The phase-down of EFTA rates of
duty have been implemented in terms of the SACU/EFTA Trade
Agreement, and the rates of duty on paper and paperboard of
tariff subheading 4811.41.90 as recommended in ITAC Report 151
(See Government Notice No. R. 928 dated 28 November 2014
(1/1/1505) with effect from 1 January 2015)
(Government Gazette 38240 dated 28 November 2014).
- Anti-dumping item
201.02/0207.14.90/01.08 has been deleted and certain new
anti-dumping duty items on chicken have been inserted in Part 1
of Schedule No. 2 as a consequence to an earlier deletion in
Part 1 of Schedule No. 1 (See Government Notice No. R. 929 dated
28 November 2014 (2/1/361) with effect from
1 February 2015) (Government Gazette 38240
dated
28 November 2014).
- Various Anti-dumping items on plastics
have been inserted in Part 1 of Schedule No 2 as a consequence
to an earlier amendment to in Part 1 of Schedule No. 1 (See
Government Notice No. R. 930 dated 28 November 2014 (2/1/362) with
effect from 1 January 2015) (Government Gazette 38240
dated 28 November 2014).
- Various anti-dumping items on
glassware have been inserted under item No. 213.03, and certain
existing anti-dumping duty items on glassware have been amended
under item No. 213.03, as a consequence to an amendment in Part
1 of Schedule No. 1 (See Government Notice No. R. 931 dated 28
November 2014 (2/1/363) with effect from 1 January 2015)
(Government Gazette 38240 dated 28 November 2014).
- Countervailing items Nos. 235.00
and 235.01 have been deleted as they have become redundant. (See
Government Notice No. R. 932 dated 28 November 2014 (2/2/4) with
effect from 1 January 2015) (Government Gazette 38240
dated 28 November 2014).
- Amendment of rebate item No.
306.02/7010.90/01.05 to correct the rebate code applicable to a
6-digit code and deletion of rebate item No. 306.14/12.01/01.04
as the expiry date was 30 June 2011. (See Government Notice No.
R. 933 dated 28 November 2014 (3/1/706) with effect from 1
January 2015) (Government Gazette 38240 dated 28
November 2014).
- Rebate item No. 311.03 is
amended to read "Industry: Textile Weaving". (See
Government Notice No. R.934 dated 28 November 2014 (3/1/707) with
retrospective effect to 7 December 2012) (Government
Gazette 38240 dated 28 November 2014).
- Rebate item 497.01 is deleted as
no headers are required for these items. (See Government Notice
No. R. 935 dated 28 November 2014 (4/5/1) with effect to
1 January 2015) (Government Gazette 38240 dated
28 November 2014).
- Rebate items Nos. 498.01 and
498.02 are deleted as no headers are required for these items.
(See Government Notice No. R. 936 dated 28 November 2014 (4/6/1)
with effect to 1 January 2015) (Government Gazette
38240 dated 28 November 2014).
Download the latest Customs Watch
to have access to the latest tariff amendments.
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