Originally published in Recent Developments in Taxation, July 2011

The SARS Customs authorities recently published the second drafts of the Customs Control Bill and Customs Duty Bill, allowing the public a short period for comments by May and June 2011, respectively.

The Bills are two out of three which are to collectively replace the existing Customs and Excise Act, No. 91 of 1964, as amended annually. The third Bill to make up the balance of the new legislation, and which the SARS has not yet published even a first draft of, is the Excise Duty Bill.

The existing Act, read together with its extensive set of supporting Rules, sets out the basis for customs officials' control of goods being imported and exported; the principles for levying of customs duties; and the detail of how excise duties are levied on certain categories of goods being imported or locally manufactured. These three aspects of the legislation have been separated out and allocated to the relevant new Bill.

The Customs Control Bill is explained by the SARS to be the "platform" for implementing all other tax laws that are concerned with goods being imported into or exported from South Africa. This means that other specified tax acts will ultimately rely on the Customs Control Act for their implementation (and must therefore be read with the Customs Control Act).

One of those "specified" tax acts which will depend on the Customs Control Act for implementation, is the Customs Duty Bill when it becomes an act. Another is the planned Excise Duty Act. In addition, the Value-Added Tax (VAT) and Diamond Export Levy Acts will also have to be read with the Customs Control Act once it is effective.

The draft Bills contain similar provisions to those contained in the existing legislation, but many of the details contained in the rules are now sought to be included in the body of the Bills, making the Acts themselves significantly more voluminous and detailed.

While the updated legislation aims at modernising the customs administration in the country and bringing it in line with international trends and best practices, it also broadens and tightens customs authorities' powers of enforcement against traders.

Clients who deal with customs authorities in the course of business are urged to keep abreast of the status of the proposed changes to the legislation and to investigate the effect the amendments will have on their day-to-day operations.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.