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President Cyril Ramaphosa is eager to create an investor friendly climate in the country but it seems that customs clearance and exchange rules imposed by the South African Revenue Service is having the opposite effect. Recently a health science start-up company told me how their overseas investor eventually decided to undertake tests for one of their products that they planned to roll out in South Africa to a European destination as customs at Oliver Tambo were holding up their goods for months, waiting for clearance from SARS which cost the firm valuable time and money. South Africa lost out on an investment opportunity because of red tape and an overly strict application of exchange controls. President Ramaphosa has said recently that red tape was keeping tourists away from the country, but as I illustrated in this case, it is not only tourists, but also investors the country so sorely need who are put off by red tape and exchange regulations from SARS. A member of our business community has highlighted how SARS is not reducing red tape, but has in fact increased it for individuals buying goods from overseas internet websites. John Pearson was told that he has to register as an importer at SARS if he buys more than three online products a year from online businesses overseas. Pearson contacted Biznews as he thought many South African may be experiencing the same issue. – Linda van Tilburg
I’ve got John Pearson on the line and he’s had problems with books he’s been buying from Amazon UK but apparently they now say that if you buy more than three books you have to register as an importer. John, tell us about your experience.
Yeah well that’s true. That was a surprise. I have from time to time ordered a book from Amazon or a couple of books and I recently placed an order with them for a pair of books; one was delivered last week and as Amazon do, they had indicated to me that the second book would be at a separate delivery date. The next thing, after I received an email from them saying they despatched the book, I got a mail from UPS, the local office of UPS to say that I now needed to give them an importer code for this book. Of course we went through the story but I’ve just received one and I have received it before; you have asked for my ID number which I have supplied; why an importer code now? And they said that SARS have now got a ruling that if you have more than three imports which come in under your private ID number, you are regarded as being a regular importer, therefore you need to go and register as an importer. And they sent me a mail with some forms attached which are clearly forms for a business. They certainly are not for an individual. And again, I queried this and they said; ‘well this is the rule’. You’ve got to do it, if we don’t do it by a certain time, I think it was about a week, the shipment would then be destroyed. So what I did in the meantime was, I was able to supply them with an importer code from my company which really wasn’t the intention because this was a private book. On receipt of the importer code, they have released the shipment and I believe I’m going to get it now.
Did UPS the courier, did they tell you that there’s been a change in the rules of SARS.
Well they didn’t as much say a change; in the communication I indicated to them what I didn’t understand is that, if an individual shipment exceeded a certain value I was aware that it needed to be brought in by a registered importer. I believe that value to be R25,000 but UPS said to me, no it was fifty thousand rand. However there is a ruling from SARS now, whether they are indicating it’s a recent change I’m not certain but they just indicated to me that SARS are now saying that if you import more than three times as a private individual of goods that you’ve bought online, you are now required to go to SARS and register as an importer. I’ve not done this but it just seems to me a level of bureaucracy that surprises me in this day and age when we talk about open and free trade. And for a number of years, I’ve been able to freely purchase something that I have seen that has caught my eye. I can say that I’ve really done this an awful lot, maybe I’ve done it, I don’t know, half a dozen times in a year, but this is what has just recently happened and as I said before I am totally surprised and it smacks to me of just a level of bureaucracy that I thought had fallen away way back when, it certainly doesn’t promote any kind of free trade at all. That’s for sure.
So you don’t think it might be an overzealous courier, UPS in this regard.
Yes it’s quite possible that it could have been but they are the designated courier that Amazon has appointed in this particular case. And I’ve got no way of knowing. I haven’t gone to another company like DHL and said to them, can you verify this is a rule that I haven’t done.
So what is the form that they were talking about? Do you have information about that?
The form that they they’ve given me, they gave me three. They’re all slight variations of another. I’m not sure why I’ve got to complete all three for SARS but that’s what they sent me. But when you go through it, it’s clearly a form that needs the details of what is a registered business; whether it’s a privately held company, whether it’s a cc (closed company), whether it’s somebody trading for their own account as a single trader. But the structure of the form is very definitely for business, since I’ve just bought these books for my own private use; I have no intention of selling them and trading in them.
You say you were a director of a company, so for an individual who just wants to order books from overseas this might be become a serious problem?
Yes I mean, I didn’t do it in any capacity as being director of a company of which I no longer am. I’m semi-retired and I no longer am a director. I simply went to Amazon and used my details that they have had on record for years and simply placed another order. And as you may well know if you use Amazon, you’ve got the simplicity of a single click where you’ve got your registered details there and it was just a simple purchase in my own private capacity, it certainly wasn’t in a business capacity.
So did it change the kind of duties, VAT or tax you had to pay on it?
I’m not aware of that. Linda. Not yet. There was an amount that Amazon put on there as a contingency amount of what they calculated to be the duty on the goods coming into South Africa. They have a courier fee but there is a line item that indicates that they make a contingency for an importation fee to your country. Now that I would imagine is them being aware of the duty on that particular item. So that gets included in the Amazon price that you pay.
There’s a new climate that Cyril Ramaphosa wants to have in the country of being investor friendly and what that kind of does to it, the fact that it’s getting just more difficult and there seems to be more red tape?
Well Linda, this is my surprise about it and this is why I thought I would alert you folks to this, because to me it runs completely against what we are trying to do as a country, to what we desperately need is to be part of this world economy. And it just smacks to me of something that is completely retrograde to the environment that we are looking to achieve and and I’m just so certain that I can’t be a unique individual. I’m sure there must be many South Africans who purchase items on the Internet with suppliers who are outside South Africa you know, and I can understand that we can you know that we’ve got to have some level of understanding and control, and pick up the stats and know how the money is moving. But this was all done in the past on one’s ID number as a personal individual but in this particular case I was clearly told by UPS I can no longer be cleared under my ID number. That’s what they say.
Thank you John for speaking to us, a retired director, about the problem with buying books from Internet companies like Amazon, as a private individual. Thank you so much.
And I’m sharing the story because I don’t think I’m alone and there could well be a number of other people that, you know find that they have done a couple of purchases on Amazon who were faced with the same dilemma that I found last week.
Cyril Ramaphosa: The Audio Biography
Listen to the story of Cyril Ramaphosa's rise to presidential power, narrated by our very own Alec Hogg.