ERS eases customs burden for businesses
MBABANE – Eswatini Revenue Service (ERS) has introduced a new system that will ease tax payments for businesses involved in trade.
The system is known as the Sekulula VAT Easy system, which enables importers to settle the value added tax (VAT) liability for goods imported into Eswatini by using qualifying invoices where such goods were purchased from South African VAT-registered vendors.
This means that if a company purchases goods from a South African VAT-registered vendor, they would not pay tax at the border but declare that the goods they have bought have been paid for and tax was included in the payment.
Exporters
ERS Director of Customs Technical Precious Chauya said only business entities based in Eswatini, that are registered by South African Revenue Service (SARS) as foreign exporters, and purchase goods from a VAT-registered vendor in South Africa were eligible.
She said the benefits of this system was that the VAT paid in South Africa on the purchase of goods would be claimed by the ERS on behalf of the importer of the same goods, and the refund received would be used to offset the VAT liability for the goods being imported into Eswatini.
She said this also eased cash-flow requirements for the importer.
“The facilitation of the process to claim the refund from the SARS is handled by the ERS. Increased compliance levels as importers fully declare goods purchased in South Africa on which VAT was incurred. This increases the country’s VAT and SACU revenues,” she added.
To register as a foreign exporter with SARS, an entity is required to complete a form, which is to be accompanied by Form DA185, used as a nomination or appointment of an agent who is approved by SARS to perform the functions of a licenced clearing agent on behalf of the foreign principal in complying with all legislative obligations required of exporters.
When asked about how the system worked for commercial importers, ERS said all declarations submitted to SARS and ERS should reflect the Eswatini importer or nominated agent as ‘exporter’ in the following fields of the SAD 500 customs declaration form.
They said upon entry into Eswatini, use ASYCUDA World to declare the goods to ERS Customs, submit documents required for claiming to ERS Customs, and the ERS Customs officials would check the submitted declaration to ensure that it met all procedural requirements, after which the goods would be released without requiring a payment for the VAT due.
ERS added that the system was applicable in six border posts at the moment: Ngwenya Border Post, Lavumisa Border Post, Mahamba Border Post, Matsamo Border Post, Mananga Border Post, and Sandlane Border Post.
Meanwhile, trucks importing goods to Eswatini from South Africa will no longer be stuck at the Oshoek border post after 5 pm.
This was after the Republic of South Africa assured to review the customs transaction time zones at the Oshoek border post.
Oshoek in Mpumalanga is the main border post between South Africa and Eswatini and is currently operating 24 hours a day.
Challenge
However, trucks importing goods to Eswatini were facing a challenge of time; after 5pm the clearing agent at Oshoek would close their offices while the Ngwenya border and its clearing agents remained operational.
These have caused kilometres of traffic on the Oshoek side of the border as trucks are forced to wait until the next morning to clear their goods. It has further affected the efficiency of imports by creating a backlog.
The above challenge was raised by Business Eswatini Chief Executive Officer (CEO) Nathi Dlamini last month during the business breakfast meeting organised by the South African High Commission to promote trade and investment with local CEOs at the Royal Villas. The South African High Commissioner to Eswatini, Advocate Thoko Sipamla, assured that the time zones would be reviewed since the border was the second busiest in South Africa.
She stated that goods between the two countries totaled E21.732 billion for the fiscal year 2021/2022, an increase of 16.6 per cent over the fiscal year 2020/21, and that it was the most important trade route.
“Both the South African and Eswatini economies are benefiting from growing trade between our two countries; Eswatini is currently exporting almost 70 per cent of its goods and services to South Africa,” she said.
Sipamla added that for the 2021/22 fiscal year, the country imported E23.676 billion, which reflects a total of 73.55 per cent of its entire imports for the year-an increase of 24.45 per cent over the 2020/21 financial year.
The Minister of Commerce, Industry, and Trade, Manqoba Khumalo, suggested that a one-stop border post with ERS and SARS work together.
He said this would increase efficiency and avoid the creation of backlogs.
Khumalo also mentioned that both governments must take real, practical steps to achieve a working partnership that would stimulate investment, improve ease of doing business, break down trade barriers, mobilise our domestic resources, and support our vision of boosting economic growth through investment and trade.
“We can build further on this shared agenda with an Eswatini-South Africa Investment Summit that can be hosted in both countries,” the minister suggested.
Importance
He further mentioned that this underscored the importance of a strengthened trade mechanism between the two countries.
Khumalso said both governments needed to work together to ensure the seamless movement of goods and services across our ports of entry, especially the Ngwenya/Oshoek border post.
Standard Bank of Eswatini CEO Mvuselelo Fakudze added that security on routes were also a challenge for some traders, especially at night. He said it was important that the routes be secured to avoid any security challenges.