Member States: Botswana, Lesotho, Namibia, South Africa, and Swaziland

Recording of customs and excise duties in SACU

Member StatesSeminar on Developing a programme for the

implementation of the 2008 SNA and supporting statistics

17 – 19 October 2012Pretoria, South Africa

Introduction

• SACU’s Vision– An economic community with equitable and sustainable

development, dedicated to the welfare of its people for a common future.

• The 2002 Agreement sets out a broad framework for enhanced integration with clear mandate, objectives, institutions, decision making and financing procedures.

SACU Institutions

• Article 7 of 2002 Agreement provides for establishment of six institutions essential for the running of the Custom Union:– The Council of Ministers– The Customs Union Commission– The Secretariat– The Technical Liaison Committees– Tariff Board– Tribunal

The Role of the Secretariat

• The Secretariat is responsible for day to day administration of SACU, headed by the Executive Secretary.

• The Secretariat coordinate and monitors the implementation of all decisions of Council and the Commission.

• The Secretariat arranges meetings, disseminates information and keeps minutes of meetings of SACU institutions.

• The Secretariat assists in the harmonization of national policies and strategies of Member States in so far as they relate to SACU.

The Role of the Secretariat

• The Secretariat is responsible for keeping a record of all transactions into and out of the Common Revenue Pool.

• The Secretariat is the depositary of all records of SACU

• The Secretariat coordinates and assist in the negotiation of trade agreements with third parties

Common Revenue Pool

• Part Six of the 2002 SACU Agreement establishes a Common Revenue Pool consisting of all customs, excise and additional duties collected in the Common Custom Area

• All duties collected in the Common Custom Area is paid into the Common Revenue Pool, within three months of the end of each quarter of a financial year.

• Part Seven of the Agreement provides a formula for the determination of the respective shares of each Member State out of the Common Revenue Pool.

Common Revenue Pool

• The Revenue Sharing Formula has three distinct components:– The customs component that uses intra-SACU trade

data– The excise component that uses nominal GDP at

market price– The development component that uses GDP per

capita

GDP Compilation

• The use of GDP in the Revenue Sharing Formula calls for the harmonisation of the methodology used in compiling GDP in Member States for fair distribution of revenue

• It has been established that there are inconsistencies in the treatment of SACU receipts in the compilation of national accounts

GDP Compilation

• SACU has adopted a program on harmonisation of GDP, that covers the following areas:– Consistent compilation of taxes on products– Inclusion of small units/informal sector into the national accounts– Comprehensive business register developed and maintained– Development of supply and use tables– Implementation of SNA 1993 / 2008

Customs and excise duties

• Customs duties are payable when goods first enter the economic territory of any SACU Member State from outside SACU.

• No customs duties are payable when goods enter the economic territory of one Member State from another

• For goods in transit duties are collected at destinations thus no Member State collect duties on behalf of another.

• All duties collected by Member States are transmitted into the CRP

Customs and excise duties

• The excise duties is collected on specified goods that are produced and consumed in SACU

• No excise duties are levied on the specified goods that are exported to non-SACU countries

• The excise duties are payable at factory gate and excise duties are not payable when the goods enter the economic territory of one Member State from another

Current Practice

• Customs duties collected by a Member State (A) on goods that are later re-exported to another Member States (B) should be attributed to Member State (A) and included in taxes on products in the derivation of the GDP of Member State (A), while other have argued that it should be attributed to Member State (B) and added to taxes on products of Member State (B).

• Excise duties should be attributable to the country of final consumption, while others link the excise duties to the country of production.

Thank You For Your Attention