Tax Tariffs, Custom Duty & Certificates
How are tax tariffs and custom duty charges levied on goods imported to South Africa?
A tax tariff is the duty imposed by a government on imported goods. The duty changes from product to product and in order to pay the correct duty, importers must use the correct tax tariff.
“In the case of the import of model cars, the best and correct tariff code to use is 9502.00.90. The VAT payment on this type of import is 15%”, explains SARS, Lester Millar.
All the tax tariff codes that are required when importing goods to South Africa are clearly listed on the SARS site which will take you directly to the tariff code guide which consists of 1023 useful pages of codes and information:
- Schedule 1 Part 1: This schedule lists “Ordinary Custom Duty” codes
- Schedule 1 Part 2A: Lists specific excise duties and specific customs duties on imported goods of the same class or kind.
- Schedule 1 Part 2B: Explains Ad Valorem excise duties and Ad Valorem customs duties on imported goods of the same class or kind.
How is customs duty calculated?
Customs duty is levied on imported goods and is usually calculated as a percentage on the value of the goods (set in the schedules to the Customs and Excise Act).
However meat, fish, tea, certain textile products and certain firearms attract rates of duty calculated either as a percentage of the value or as cents per unit (for example, per kilogram or metre).
The amount and type of duty imposed on a product is determined by:
- The value of the goods (the customs value);
- The volume or quantity of the goods; and
- The tariff classification of the goods (the tariff heading).
- Value-Added Tax at the rate of 14%
When to pay duty?
Many goods, especially industrial inputs, enter duty free. Where duties apply, the rates generally fall between five and 25%.
Goods not exceeding a value of R400 are not liable for customs duty and do not have to be entered on a bill of entry.
To establish if goods imported into South Africa are free of duty refer to the South African Revenue Services. All the tax tariff codes that are required when importing goods to South Africa are clearly listed on the SARS site.
- Schedule 1 Part 1: This schedule lists “Ordinary Custom Duty”
- Schedule 1 Part 2A: Lists specific excise duties and specific customs duties on imported goods of the same class or kind.
- Schedule 1 Part 2B: Explains Ad Valorem excise duties and Ad Valorem customs duties on imported goods of the same class or kind.
- Schedule 3: Specifies general industrial rebate
What are the ranges of tariffs levied on imported goods to South Africa and how are they categorised?
South African tariffs on imported goods are categorised as follows:
- 0% on agricultural products and implements, capital and intermediate goods, manufacturing inputs, essential foods.
- 15% on aircraft, vehicles, earthmoving equipment, computer software, appliances, etc.
- 40% on luxury consumer goods, for example, televisions, tape recorders, video machines, antiques, jewellery, etc.
When is a Certificate of Origin required?
The South African Declaration (or certificate) of Origin, Form DA-59, certifying the country of origin, description of goods, weight, is required for:
- Stainless steel tableware
- Kitchen items
- Household articles
- Iron or steel except stainless steel
- Motor vehicle air filters, motorcycle oil or petrol filters, and parts for motor vehicle filters
- Reception apparatus for radio telephone or radio broadcasting apparatus
Other basic documents required for importation include:
A commercial invoice that shows the price charged to the importer in addition to the cost of placing goods on board ship for export.
- Bill of Lading
- Insurance documents
- Packing list
- At least three copies of the invoice should go forward under separate cover to the consignee prior to the arrival of the goods
- Other special documentation may be required by the importer.