News in South Africa 21st November:
1. Sars APN impacts imports:
On 1 December, the South African Revenue Service (Sars) will implement new advance payment notification (APN) requirements in a bid to combat illicit cash flows. The changes will impact all import payments valued at R50 000 and above.
An APN is an application made by an importer to give notice of the intention to make an advance import payment in excess of R50 000 to a supplier of imported goods. It is submitted via Sars eFiling.
An advance import payment is any foreign exchange payment made for the importation of goods before the goods are shipped by the supplier.
As much as Sars’s new APN requirements might feel like a headache, they’re an important development.
With the new APN requirements, Sars will be better able to track advance import payments and eventually bring additional efficiencies to the customs clearance process.
However, many importers, already frantically trying to meet end-of-year orders, will feel that the changes are yet another complication in what can already be a complex space.
Apprehension
They may also feel some apprehension about the new regulations, especially if they weren’t previously aware of them. For almost all importers their primary concern is growing their business. Anything that distracts from that isn’t going to be met with enthusiasm.
Most understand the logic behind the decision and would eventually adapt – but would still have to put extra work into doing so. But it doesn’t have to be this way. With the right international payments partner, importers can adjust with little to no effort on their part.
Dealing with things such as Sars requirements should be a given for any payments provider. Its job is to ensure that payments are as seamless as possible, and it cannot claim to do that if it doesn’t have the expertise to guide its customers through things like regulatory changes.
This level of service should apply to every aspect of currency exchange for importers, exporters, and ordinary individuals.
Unfortunately, it’s the kind of customer service that many traditional international payment providers – including banks – struggle with.
While traditional currency exchange providers such as banks undoubtedly have the technical capabilities to facilitate international payments for importers and others, they tend to fall short on customer service.
We all know how difficult it can be to get assistance from a bank, even on fairly mundane transactions. You can spend hours on the phone being pushed from pillar to post, only to come out even more confused than when you first made the call.
That is no less true for importers and international payments. Unless you’re a really big player in the sector, your bank likely sees you as just a number and won’t give you the tailored assistance you need.
An international payments provider should not only understand the regulations and technicalities associated with such payments but also place a premium on customer service.
Ultimately, you want a provider that understands how important international payments are to your business and is fully committed to making them as seamless as possible. More than that, they should be able to provide you with detailed, knowledgeable assistance with payment queries when you need it most.
2. Energy security prioritised over emissions:
South Africa is likely to prioritize energy security over its decarbonization aspirations to avoid further damage to its economy, said James Mackay, the CEO of the Energy Council of South Africa.
That would involve extending the life of some of state power utility Eskom’s coal-fired plants.
The cost may be reduced access to concessional climate finance and a decline in the competitiveness of South African exports as the European Union ramps up levies on imported products that have carbon-heavy production processes, he said.
“Energy security is fundamental to economic growth and activity,” Mackay, whose organization’s members include Anglo American and Glencore, said in an interview.
“The problem is that we are not solving decarbonization. We are actually going to be pushing out our decarbonization targets because we are going to live with extended, recapitalized coal.”
South Africa is the world’s 14th-biggest source of climate-warming greenhouse gases. While the government has set an ambitious target to reduce its emissions by 2030, it’s contending with recurrent power outages that are dragging down economic growth.
The quickest way to end blackouts is to repair Eskom’s old and poorly maintained coal-fired plants.
Private companies are being encouraged to build renewable energy plants, but there isn’t sufficient transmission capacity to connect many planned projects to the grid.
That means money is likely to be spent on extending the life of a number of Eskom’s plants that use fossil fuels and plans to close about a quarter of its coal-fired capacity by 2030 may be delayed, Mackay said.
The government and Eskom have said this is being considered.
“We are probably seeing anything from three to four years on some of the smaller stations to even up to 10 years on some of the mid-life stations,” Mackay said.
Eskom said it’s still considering whether to extend the life of the plants and has yet to ascertain the cost or impact on emissions of doing so.
South Africa last year secured a commitment from some of the world’s richest nations to provide $8.8 billion in climate finance to help it transition away from the use of coal, which currently accounts for more than 80% of the power generated in the country.
The funding pledge came with the understanding that some coal-fired plants would close.
If the plants are kept open for longer, a clear decommissioning plan will be needed to attract the finance required to add renewable energy capacity and bolster the transmission grid, Mackay said.
3. R14 billion in state losses:
While acknowledging that challenges still remain, Cabinet says the outcomes of the 2022/23 national and provincial government audits “dispel” claims that state capacity is in total collapse.
“Cabinet was briefed by the Auditor-General of South Africa (AGSA) on the outcomes of the 2022/23 financial year national and provincial audits.
“The AGSA pointed out an encouraging trend of continuous improved performance, which indicates overall improvement in accountability, transparency, adequacy and effectiveness of controls.
“The departments and institutions that have achieved unqualified audits with no findings (clean audits) have increased from 94 during the 2018/2019 to 147 during 2022/2023, reporting a year-on-year improvement,” said Minister in The Presidency, Khumbudzo Ntshavheni, at a Post-Cabinet media briefing on Monday.
The AG’s report also showed that the departments and institutions that have achieved unqualified audits with findings are 162, which represents 39% of the audited institutions.
The AG noted that the institutions and departments with disclaimed findings have decreased from 25 during the 2018/2019 reporting period to five during the 2022/2023 reporting period, which represents only 1% of audited institutions.
“Although the Auditor-General reports an estimated R14 billion in financial losses, measures to address material irregularities also show an improvement.
“Although challenges still remain, the outcomes of the 2022/23 national and provincial government audits dispel claims that State capacity is in total collapse, with independent and objective assessment by institutions such as the AGSA indicating a very strong and continuous improvement trajectory,” Ntshavheni said.
4. Government tax evaders:
The SA Revenue Service (SARS) has noted an increasing level of indebtedness by government departments, which is of growing concern.
While the vast majority of the 5,303 entities paid their debts on time, 404 entities owe SARS R5.9 billion for the 2023/24 fiscal year.
Finance Minister Enoch Godongwana said it’s not right for SOEs not to pay the tax office, which generates the revenue that enables them to exist.
5. Water is SA’s next crisis:
Astral Foods, SA’s biggest poultry producer, has secured a water licence to pump its own water due to the collapsing local infrastructure of the Lekwa municipality in Mpumalanga.
The move will cost up to R100 million.
The group warns that SA’s water infrastructure is in a dire state, and it is likely to be SA’s next big challenge, similar to the electricity crisis.
All information sourced from articles posted by: Moneyweb, DailyInvestor, BusinessTech, BusinessDay, and Fin24.
