18 May 2023 – Clarity on the extension of the Diesel Refund to manufacturers of foodstuffs
In the 2023 budget speech, the Minister of Finance announced the following tax relief measures in an effort to address the current load-shedding problem the country is facing:
“Government implemented the diesel refund system in 2000, to provide full or partial relief for the general fuel levy and the RAF levy to primary sectors. The refund system is in place for the farming, forestry, fishing, and mining sectors. In light of the current electricity crisis, a similar refund on the RAF levy for diesel used in the manufacturing process (such as for generators) will be extended to the manufacturers of foodstuffs. This will take effect from 1 April 2023, with refund payments taking place once the system is developed and will be in place for two years until 31 March 2025. This relief is implemented to limit the impact of power cuts on food prices.”
SARS will administer the new refund to the extent of 80% of the RAF levy for diesel purchased for use and used in the manufacturing of foodstuffs through the DA66 Excise Refund System. The currently manual DA66 process will be automated in the last quarter of 2023 and is separate from the diesel refund system that is administered through the VAT system by way of submitting VAT 201 returns.For more information, see the letter to stakeholders.
- 5 August 2022 – Taxing of Alcohol Powder Products
The current excise duty regime applies a flat excise rate of 34.7c/kg for traditional African beer powder. As there are similar products on the market, and in the interest of equity, these alcohol powder products will be included in the tax net with an excise rate equivalent to that of the traditional African beer powder from 1 October 2022. In terms of the National Treasury’s proposal, alcohol powder products classified as preparations for use in the manufacturing of alcoholic beverages will be taxed. See the letter to trade here.
15 June 2022 – Excise essential guide for Small Businesses is now available in all official languages:
4 February 2022 – Excise Payment Dates for 2022
WHAT IS IT?
Excise duties and levies are imposed mostly on high-volume daily consumable products (e.g. petroleum and alcohol and tobacco products) as well as certain non-essential or luxury items (e.g. electronic equipment and cosmetics). The primary function of these duties and levies is to ensure a constant stream of revenue for the State, with a secondary function of discouraging consumption of certain harmful products; i.e. harmful to human health or to the environment. The revenue generated by these duties and levies amount to approximately ten per cent of the total revenue received by SARS.
WHO IS IT FOR?
Excise Duties are payable by manufacturers of the following products and are levied throughout the Southern African Customs Union (SACU), consisting of the Republic of South Africa, the Republic of Botswana, the Kingdom of Lesotho, the Republic of Namibia and the Kingdom of Swaziland:
- Ad Valorem Products
- Alcohol Products
- Petroleum Products
- Tobacco Products
Excise Levies/tax are/may be levied separately and uniquely on different products by each individual SACU member state; in South Africa currently on the following products:
- Air Passenger Tax
- Diamond Export Levy
- Environmental Levy Products
- Fuel Levy and Road Accident Fund (RAF) Levy on Petroleum Products
- Health Promotion Levy on Sugary Beverages
- International Oil Pollution Compensation Fund Levy (IOPCF)
In addition to duties and levies, we also have the Diesel Refund System for qualifying entities.
WHAT STEPS MUST I TAKE?
Relevant entities in the RSA must license with SARS Excise before they start to manufacture or otherwise deal in any of these products on which the applicable Excise Duty and / or Levy has not yet been paid. There are 14 Excise offices around the country. To see the list of offices and contact details, click here.
WHEN AND HOW SHOULD IT BE PAID?
These duties and levies are self-assessed by the client per periodic Excise return and, depending on the product, paid to SARS on either a monthly or quarterly basis. To view the Excise Duty/Levy submission and dates for 2021/2022, click here.
To access this page in different languages click on the links below: