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BLSA hits out at Sars’ proposed fragmentation of customs functions

Business Leadership South Africa:

Business Leadership South Africa (BLSA) has come out against the South African Revenue Services’ (SARS) proposed transfer of customs functions to a new Border Management Agency, which is currently being carried out at country’s border posts. SARS must remain the responsible agency for customs and excise.

BLSA said that Business has consistently opposed the separation of customs collections, which comprise some 30% of the country’s total revenue collection, from the administrative control of SARS. As reflected in the Minister’s Budget Speech in February, customs and excise administration are integral functions of our revenue system. The Davis Tax Committee has recommended that it would be imprudent to fragment customs administration and customs collection.

BLSA has several concerns regarding the risks the proposed transfer.

In summary, these are:

  • The efficiency of integrated administration, collections and enforcement processes ensures revenue maximisation.
  • The findings and recommendations of the Socio-Economic Impact Assessment System (SEIAS) commissioned by the Department of Home Affairs do not appear to have received due consideration.
  • There is high risk of a negative impact on legitimate trade given the fact that the process of implementing the New Customs Acts has only just begun.
  • BLSA believes that functions related to trade facilitation such as customs and phytosanitary inspections conducted at ports of entry and exit will be harmed by the fact that the border officials will no longer be working under the supervision and instruction of the line departments with the relevant expertise in these matters.

Business notes the Deputy President Cyril Ramaphosa’s ongoing bilateral talks with the Ministers of Home Affairs and National Treasury to find a mutually acceptable outcome. BLSA has also requested a meeting with the Deputy President in his capacity as Leader of Government Business in Parliament to provide the views of the private sector.

The need for proper management of South Africa’s borders is supported, as is the effective enforcement of our customs and excise rules and regulations. However, BLSA does not believe that the Border Management Agency Bill currently before Parliament is the appropriate mechanism to achieve this.

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