Could Reference Price Guidelines be on the Cards to Combat Customs Fraud?

 

Author: Nesh Freight | Date Published: 17 February 2010 14h20 | Article Release

 

As customs duty fraud increases on a nearly daily basis, the South African Revenue Service (SARS) is considering introducing reference price guidelines for imported goods to combat this rising pandemic.

 

With fraud and corruption at an all time high, the industry is crying out for some governance, best practices and control to restore balance and ensure the smooth running or cross border trade.

The 42 South African Revenue Service customs branches (10 are at airport, 19 land border posts, 5 sea ports, 2 inland rail ports and 3 at the international mail centers) aim to protect the economy and society, facilitate legitimate trade and contribute to South African border security.

In SARS’ presentation to the portfolio committee on economic development in Parliament recently, they made specific reference to the following, as well as other problems, which have had a negative effect on South Africa’s local economy growth and stability:

• Rapid growth in illicit trade which rose out of low levels of compliance. This illicit trade was compounded by the global economic downturn and has resulted in legitimate business crying out for a mechanism to combat the compliance issue.

• SARS went out to say that the root cause of the problem could be attributed to the opening of the South African economy as this facilitated the under evaluation of goods, false declaration of origin, the misuse of duty rebates and allowed officials to be even more easily corrupt.

• SARs noted that the legislative as well as policy gaps exist and these need to be filled or policed with harsher penalties and fines for those who transgress or try to circumvent these regulations.

To alleviate these as well as many other concerns, SARS recommended the following courses of action, some of which it has already instituted :

• The skills level within the criminal investigations and audit divisions needs to be significantly increased.

• The institution of target enforcement investigations on tax contraventions and customs has already been put in place by SARS.

• The Customs and Excise Act needs to be relooked to allow for the registration of sector specific traders.

• SARS plans to increase the number of cross-border inspections carried out on factories in the neighbouring countries.

Nesh Freight believes that these interventions are definitely needed to ensure that the customs and cross-border trade industry may once again return to the good name it used to have.

SARS is definitely moving in the right direction to effectively control and “police” cross border trade.

For more information on how Nesh Freight can assist you with your cross border trade either via road, sea or air; as well as assisting you in complying with the proper and lawful compliance of customs n South Africa, please contact Nesh Freight on +27 827 9561 or email on info@neshfreight.co.za

 

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