South African Tax Authorities Help Clothing Industry

by Lorys Charalambous, Tax-News.com, Cyprus

27 August 2013

The South African Revenue Service (SARS), recognizing the significant role the clothing, textile, leather and footwear sectors play in the South African economy, has highlighted the support it is providing for businesses in these industries.

SARS has stressed that it considers them as strategic economic sectors that require significant attention given their potential to create jobs and grow the domestic economy, and sees one of its roles as protecting them against the flow of illicit clothing and textiles across South African borders.

Its Customs Administration division is, for example, in the process of reviewing and modernizing existing customs and tax regulations, the licensing of trading entities and implementing a more effective penalty regime to deter non-compliance. A price-referencing system has been developed and has been built into the risk-engine of Customs to ensure that imports and exports that present high risk or goods that are priced out of the norm, are stopped for inspections.

SARS is improving its ability on case selection to identify high risk transactions more accurately. This, it says, means an increased number of successful, focused tax and customs interventions by SARS in these industries. The new Tax Administration Act has introduced additional investigative powers which will be utilized more frequently.

As SARS is the authority responsible for issuing importer registrations, it has stressed that it will withdraw such registrations for offenders. SARS will also withdraw licensing for warehouses and clearing agents in instances where they are found to have conspired with offenders.

SARS has therefore confirmed how it remains committed to working with industry stakeholders to improve the maximum compliance with the customs and excise tax code in these strategic sectors.

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