Transport Laws

If you are from Africa, you already know that it has a lot of regional blocs or what are also called Regional Economic Communities (REC’s).  As these communities define the laws and regulations that cover border crossing, it would be worthwhile to get a better picture of how these communities relate to its member countries and to other communities in the African region.

These REC’s are created primarily to develop mutually beneficial trading relationships between member countries but some REC’s also cooperate politically and militarily.  Many of these communities have overlapping memberships.

The picture below is a diagram of the regional trading arrangements of eastern and southern Africa.  It gives us an idea of how some states are members of more than one community.  If you wish to learn more about these communities, visit Wikipedia.

OVERLAPPING MEMBERSHIPS IN EASTERN AND SOUTHERN AFRICAN
REGIONAL ECONOMIC COMMUNITIES

COMESA: Common Market for Eastern and Southern Africa

SADC: Southern African Development Community

EAC: East African Community

BOTSWANA CUSTOMS DUTIES FOR MOTOR VEHICLES

If you want to learn more about customs duties and taxes on importing motor vehicles into Botswana, you can get loads of information from the Botswana Unified Revenue Service (BURS) website.

To see the tax rates of different motor vehicles, see this PDF file.

Although not related to this blog’s subject matter, it is worth mentioning that the site also offers an interesting feature – the Tax Calculator where you can conveniently compute your income tax, whether you are a resident or non-resident of the country.

Required documents when exporting used vehicles out of South Africa

These are the required documents and official forms when exporting vehicles from Durban to the following countries: Angola, Botswana, Lesotho, Malawi, Mauritius, Mozambique, Namibia, Tanzania, Swaziland, Zambia and Zimbabwe.

Please note that BLNS member countries like Botswana, Lesotho, Namibia and Swaziland may enjoy lower excise taxes and fees due to being part of a common customs union.  Nevertheless, the same forms and documents are required.

Some countries like Mozambique require pre-shipment inspections by subcontracted service providers such as Intertek.  Be sure to know your country’s procedure regarding this.

Documents / Forms	Issuing Agency	Additional Info
IE 91 – Application for Export Permit	International trade Administration Commission (ITAC)
Export Permit	ITAC	This is issued if application was successful
DA 550 – Bill of Entry/Bill of Export	Customs and Excise (C&E)
F178 – Request for Bank Clearance	buyer’s bank	Required only if value of vehicle exceeds SA Rand 50,000
CNV – Change of particulars of notice in respect of motor vehicles	local vehicle registering authority	CNV forms can also be downloaded from http://www.enatis.com
RPC for Export Purposes – Request for Police Clearance	local vehicle registering authority	Form must be completed by the SAPS
SARPCCO Clearance Certificate – Southern African Regional Police Chiefs Co-operation Organisation	Local police agency in the country of export
SAD500 – Customs Clearance Document	C & E	VIN/ Chassis number indicated on the form must match that on the vehicle
IRCC – Industrial Rebate Credit Certificate	Department of Trade and Industry (DTI)	This requires a proof of export such as a bill of lading or consignment note

SA car ban hits Zambia

28 May 2007

South Africa’s recent ban on imported second-hand cars driving on South African roads is beginning to hurt the Zambian economy, which has traditionally depended on motor vehicle imports for a portion of its tax revenue.

After a protracted two-year legal battle in which clearing and shipping agents challenged the 2005 ban of used cars from using the roads, the Supreme Court of Appeal in Pietermaritzburg last month upheld the ban.

Importers of used cars from South Africa and beyond are now required to transport their vehicles on carrier trucks and cargo trains up to Beit Bridge before driving them into neighbouring SADC member countries.

Kingsley Chanda, former customs and excise commissioner with the Zambia Revenue Authority (ZRA), told the Mail & Guardian that the development would affect the ZRA’s revenue levels as motor vehicle imports are among its chief revenue earners. The current customs and excise commissioner, Muyangwa Muyangwa, declined to comment.

“Transporting cars by trucks will be expensive, will add to the cost of imported cars and might result in lower importation levels. The number of imported vehicles is likely to drop,” Chanda said.

Other import routes, such as from Beira in Mozambique, Mombasa in Kenya or Dar es Salaam in Tanzania, are possible alternatives but there are concerns about security and bureaucratic bottlenecks on these routes.

Sources within the ZRA told the M&G that the loss of revenue in the wake of the new development would be enormous. “Durban has been the busiest and most popular source of imported cars. We have been clearing a minimum of 50 cars every day from South Africa through our main border areas at Chirundu, Kazungula and Katimamulilo,” said an insider who did not want to be named.

“It is a very sad development not just for ZRA but also for the whole country because it means that we shall soon seea definite reduction in revenue.”

Zambia charges up to 60% in taxes on all imported vehicles. Finance Minister Ng’andu Magande announced in his 2007 national budget earlier this year that taxation on “selected motor vehicles [would increase] by five percentage points”.

Bernard Lungu, national treasurer for Self-Help Motor Sellers Association, one of the country’s largest car dealers, said that in addition to finding “alternative cheaper routes”, his association’s members had been forced to slap an additional fee of between R1Â 500 and R3Â 000 on all imported cars.

“The increase has been necessitated purely by market forces. It has been necessitated by the increase in the importation of cars from Durban to Beit Bridge where we are now required to pay about $700 [R4Â 200] to transport a vehicle by truck. We are incurring more costs in the process and what we have done is to merely add the amount that the carriers are costing us [to the selling price],” said Lungu.

Trade experts are querying the South African government’s decision, saying that it might contradict the SADC trade protocols that seek to promote the free flow of goods and services. Both South Africa and Zambia are members of SADC.

A ministry of foreign affairs spokesperson, Mushaukwa Lubinda, however, advised Zambian motor dealers to respect the South African government’s decision, saying: “The general public should abide by the ruling and refrain from driving vehicles from Durban to Zambia to avoid being inconvenienced. Buyers who have sufficient funds to put their vehicles on carriers or cargo trains may still buy imported second-hand vehicles from South Africa and beyond.”

Source: www.mg.co.za

As distant as ever

30 October 2008

DESPITE August’s official launch of a Free Trade Zone among all Southern African Development Community (SADC) countries, the goal of greater intra-region trade seems as distant as ever. The launch of a zone is the first phase of a comprehensive regional integration plan that aims to set up the region as a customs union by 2010, a common market by 2015 and achieve monetary union by 2016.

Alison Wood, senior associate at law firm Werksmans, says almost all imports to Southern African Customs Union (SACU) countries – South Africa, Namibia, Botswana, Lesotho and Swaziland – from SADC countries are now duty free, except sensitive manufacturing sectors, such as the motor vehicle and clothing industries. However, as is the case with other free trade areas that haven’t yet achieved customs union status, each SADC country is still free to determine is own trade policy and duty rates for third countries.

“But that’s unlikely to happen, because the focus of most countries appears to be on establishing direct economic partnership pacts with other countries – mostly because internal trade isn’t increasing at anywhere near the same rate as it is with Asia and the European Union,” says Wood.

Despite increasingly open markets, intra-regional trade accounts for only around 22% of the region’s total trade – but in the case of SA just 3%. That low level is blamed partly on non-tariff barriers, such as road permits, axle taxes, toll roads and the like.

Dave Watts, executive for the SA Association of Freight Forwarders in KwaZuluNatal, who has been researching the impact of regional trade negotiations on the freight forwarding industry, says greater trade facilitation and a push to remove non-tariff obstacles to trade should take precedence over formal integration.

Under the free trade area arrangement 85% of goods in intra-regional trade will cross borders duty-free. And despite scepticism, governments have undertaken to achieve complete tariff liberation by 2012.

World Bank data shows it takes on average 91 days to comply with all trading requirements for intra-regional SADC trade, compared with 53 to 60 days for trade between SADC and countries of the Organisation for Economic Co-operation and Development. Moreover, trade in the region is severely hampered by inadequate infrastructure.

The biggest problem facing an SADC economic union is the different sized economies within the region, primarily the fact the economy of SA alone is larger than the rest of SADC combined. Furthermore, some countries such as Zimbabwe have no viable currency.

Watts says: “However, with the introduction of the SADC trade agreement in January this year a lot of work has already been done on harmonised nomenclature and commodity descriptions. Some of the external tariffs are similar because of the impact of World Trade Organisation negotiations so it shouldn’t be difficult to arrive at a single external tariff. But the greater problem is economic and political decision-making.”

A major challenge is that revenue from tariffs (which in a customs union wouldn’t go directly to countries but into a common pot) for many SADC countries is the larger part of their total tax revenue, whereas in SA it’s only 4%. That problem is already experienced in SACU, where SA pays a disproportionate percentage of customs revenue to the fiscus of the other countries – which SA’s Government views as aid. That would simply be magnified in SADC. Ironically, SACU is the oldest customs union in the world, established in 1910, and so the template already exists.

André Erasmus, associate tax director at Deloitte, says the template would simply have to be extended to other countries, though enforcement would be the greater challenge. He says there would also be difficulties in how to collect revenues from the more than 20 ports in SADC and there’s a risk that African imports might be diverted to SA ports even more so than is already the case. “Revenue sharing is vital and needs to be negotiated,” says Erasmus.

Watts says even in a customs union the freight forwarding industry will survive and flourish, as SADC countries won’t want to lose control of their revenue sources and they’d therefore seek to replace import tariffs with other taxes, such as VAT. That may require movement of goods to be tracked as much as ever, says Watts.

Source: www.fin24.com