Business Leadership South Africa (BLSA) on Wednesday said it opposes the proposed transfer of the South African Revenue Services’ (Sars’) customs functions to a new border management agency, which is what the Border Management Agency Bill, currently before Parliament, proposes.
“Sars must remain the responsible agency for customs and excise,” it stated.
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 Finance Minister Pravin Gordhan’s recent Budget Speech, 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 stated.
The organisation said it had several concerns regarding the risks of the proposed transfer, including to the efficiency of integrated administration, collections and enforcement processes.
Further, BLSA noted that the findings and recommendations of the socioeconomic impact assessment, commissioned by the Department of Home Affairs, did not receive 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,” it said, noting that functions related to trade facilitation, such as customs and phytosanitary inspections conducted at ports of entry and exit will be harmed by border officials no longer working under the supervision and instruction of the line departments with the relevant expertise in these matters.
Further, BLSA also requested a meeting with Deputy President Cyril Ramaphosa to provide the views of the private sector in his ongoing bilateral talks with the Ministers of Home Affairs and Finance to find a mutually acceptable outcome.
“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, we do not believe that the Border Management Agency Bill currently before Parliament is the appropriate mechanism to achieve this,” it stated.