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TradeSmart - 30 July 2010

Limited edition

Special Edition – Customs takes a giant leap towards the Future

Yesterday the 29th of July 2010, marked the beginning of a new era for Customs in South Africa as the South African Revenue Service (“SARS”) officially launched their Customs Modernisation programme at Megawatt Park by the Commissioner of SARS Mr Oupa Magashula to a group of the country’s largest traders and service providers.

The modernisation programme includes a total overhaul of the current Customs operating systems at SARS with the introduction of a new Customs system called TATIScms, and will be rolled out over the next few years.

This follows the modernisation of the Income Tax as well as PAYE systems, including the introduction of e-Filing over the last few years by SARS.

Objectives and drivers
The objective is for Customs to move from the current partially paper-based and human intervention driven organisation (“gate keeper”) into a new “risk manager” type focus with substantial benefits for trusted traders including fast-tracking of goods, simplified and automated processes and an improved level of service.

On the flipside to these benefits, SARS will increase their enforcement functions by a more efficient deployment of their resources and hence increase the size of the “stick” for non-compliant and illegitimate traders.

A key driver to the successful roll out of the modernisation programme is partnership and collaboration between SARS, South African Reserve Bank (“SARB”) and business.

The 5 Main Programmes of Modernisation
Modernisation includes the following 5 main components which are each summarised briefly below:

1. Trusted Trader

  • Revised Accreditation programme.
  • Currently piloted with 30 larger traders.
  • Will be roll out to wider trade.
  • Based on self assessment against strict compliance requirements.
  • Greater benefits if demonstrate greater compliance.
  • Customised service.


2. System replacement

  • Previously 37 legacy systems which were not integrated.
  • Replaced by Attics, currently used by Luxembourg Customs.
  • SARS vision to roll out TATIS to all African Customs authorities.

3. Declaration processing

  • Introduction of new Customs Declaration form (“CD1”) to replace the current bill of entry know as the SAD form.
  • Much more user friendly.
  • Alignment with World Customs Organisation (“WCO”) Data Model version 3.
  • Replacement of the current customs purpose codes with new customs procedure codes.
  • Integration of info on F178.
  • Integrated tariff, duties, rebates and duty calculations.
  • Extension of electronic release.
  •  Customs inspections/ stops
  • Process is currently paper based.
  • Introduction of case management tool/ work flow system.
  • Dashboard to be provided to trusted traders.
  • Provision for submission of supporting documents electronically.
  •  Leveraging SARS Capabilities
  • Integration of SARS contact centres.
  • Document management system.
  • Single registration for all Customs types.
  • Electronic application for registration.

Timelines
The programme has been divided into 2 phases, the first of which SARS are aiming to roll out by 1 October 2010. This will include the introduction of the new procedure & category codes; mandatory electronic release; provision of a VAT indicator and alignment with the WCO data model.

The second phase will be rolled out during the first quarter of 2011, which will be the “go live” of the new declaration processing platform.

Phase out of the F178
Also present at the launch was the South African Reserve Bank (“SARB”) who confirmed the phase out of the F178, which is currently being piloted with selected exporters. SARB aims to have this rolled out before the end of the year.

The info on the F178 will now be incorporated in the Customs Declaration and communicated electronically between SARS and SARB. SARB will then match this information to that which they receive from the authorised dealers on the proceeds.

A similar import verification system is also in the process of being developed by SARB.

How will this impact you?
While the proposed benefits may appear extremely attractive, it will require significant planning and investment in people and systems by businesses who want to capitalise on the Customs Modernisation programme. This will be a long journey which will not be easy and will require well a planned change management approach.

Customs is moving into the future. The question is, will you be on board?

Contact us
If you require more detail or would like to meet to discuss the impact of the Customs Modernisation programme on your business, please contact me on +27 11 806 5621, +27 83 630 4198 or jmichaletos@deloitte.co.za for more information.

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