Interview with Olebogeng Ramatlhodi, Africa Indirect Leader, Deloitte Africa
1. What is the most significant change to your region/jurisdiction’s tax legislation or regulations in the past 12 months?
In the last 12 months, the South African government implemented regulations specifically addressing the bunkering industry after years of uncertainty in this area. Deloitte Africa’s indirect tax team in South Africa played a role in the initial development of these regulations, particularly by offering insights into how other markets approached the bunkering sector from customs and excise perspectives. The team’s involvement didn’t stop there. They also made contributions to the original trade rules upon their publication.
2. What has been the most significant impact of that change?
The South African customs and excise system lacked comprehensive regulations for the bunkering industry, including matters related to the movement of imported fuel, local consumption, and export. This resulted in inconsistent approaches by different customs officials. This led to multiple customs audits, resulting in a halt to bunkering operations in South Africa and adversely affecting jobs and revenue.
An adjustment to the regulatory framework will offer greater certainty for industry stakeholders and facilitate the resumption of business activities that have been adversely affected over the past two to three years.
3. How do you anticipate that change impacting your work and the market moving forwards?
The new regulations provide clarity, facilitating a consistent and predictable regulatory framework. This helps new entrants understand the rules and allows consultants to give accurate compliance advice and highlight participation benefits.
Despite recent developments, some current rules remain unfriendly to businesses. Industry stakeholders are working with the government to adjust regulations and support the start of bunkering activities.
4. How has this changed the way you offer tax advice?
The introduction of clear regulations for the bunkering industry has enabled Deloitte South Africa’s indirect tax team to provide practical tax advice to clients. With greater regulatory certainty, the team can now guide clients through compliance requirements, highlight business opportunities, and help clients navigate the rules with much more certainty than before.
5. What potential other legislative/regulatory changes are on the horizon that you think will have a big impact on your region/jurisdiction?
The introduction of a voluntary disclosure relief for the Customs and Excise Act in South Africa, is a recently proposed legislative measure that may alter the operating environment for traders. This type of relief has previously been available for other taxes except customs and excise. Early indications suggest that the framework will be similar to existing relief provisions for income tax. It is expected that this dispensation could be connected to programs such as the Approved Economic Operator, serving as an additional benefit for participating entities.
6. What are the potential outcomes that might occur if those changes are implemented?
Previously, similar frameworks have boosted the government’s revenue and compliance. Although traders may initially question the fairness of this new customs and excise program, it is expected to increase both revenue collection and compliance over time.
7. Do you think that change will have a positive effect on both your practice and the wider regional/jurisdictional market?
Indeed, I believe our responsibility as tax specialists is to educate clients on the benefits of the framework and advise them on how to take advantage of the same in an effective manner as intended by the relief framework. This will include advising on the pitfalls of not timing such participation correctly, and the disadvantages of not being the first mover. Ultimately, clients will be encouraged to come forward on historical matters for regularization, and Deloitte Africa, will support them with this process.
8. Are there any regulatory/legislative changes you believe should be implemented in your region/jurisdiction?
The current legislation requires importers to adjust customs values for goods whenever multinationals implement retroactive price changes. While this maintains compliance, the process of claiming refunds from these adjustments is complicated, often requiring third-party processing that negates the value of the refunds. Recent South Africa Revenue Service (SARS) amendments have made it easier to pay taxes owed, but have not simplified the refund process for traders. To address this, I believe the refund process should be streamlined so that customs only retain taxes that are actually due.
9. How do you believe those changes would help improve the tax landscape in your market?
The proposal to simplify the refund process will result in traders paying only the taxes owed, supporting fair tax administration. This change will support the government in collecting the correct amount of revenue from traders.
10. What sort of issues surrounding the implementation of Artificial Intelligence (AI) have you seen, and how will AI implementation likely affect your work?
The adoption of AI technology in South Africa has progressed at a measured pace. This is partly because tax professionals tend to adopt new technologies later than many other sectors. As organizations introduce these technologies, more professionals are gradually integrating them into their routine tasks. With increasing AI adoption by clients, professionals may need to engage more actively with these tools as they adjust their service offerings. The types of services clients choose to outsource may shift as they recognize the benefits of AI. As the industry develops agents to handle administrative activities, professionals could allocate more time to higher-value specialized services.
11. How would you describe the tax authorities’ approach in your region/jurisdiction?
SARS is recognized as a progressive leader and early technology adopter. In recent years, the tax authority has invested in hiring data scientists and leveraging big data to enhance enforcement and client services.
This shift is prompting the industry to prepare for more frequent audits. The tax authority now conducts integrated audits, reflecting a commitment to comprehensive taxpayer reviews. With increased investment and advancing technology, including AI, the revenue authority is expected to further modernize its operations.
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