Hon Speaker, hon Ministers, hon members and Deputy Ministers present, the Customs Bills create a clear and transparent customs legal framework that supports a predictable environment aligned to international conventions and best practice.
Multinational companies that trade across the borders are familiar with the customs environment and therefore require a legal framework that underpins predictability and consistency to ensure alignment of our customs regime with the World Customs Organisation and the revised Kyoto Protocol.
The primary aims of the Bills before us are as follows: to provide systems and procedures for customs control of all goods and services entering or leaving the Republic of South Africa; to ensure the effective collection of tax on such goods imposed in terms of the tax levy Acts; to facilitate the implementation of other legislation applicable to such goods and services; and to support the promotion of exports and business competitiveness, whilst stimulating domestically orientated activity and supporting small, medium and micro enterprises.
Regarding the issue of illicit trade, in the Budget Speech the Minister of Finance highlighted the fact that during 2013 the SA Revenue Service detained 400 containers holding suspected counterfeit clothing, footwear and textiles. During February 2014 Sars seized various narcotics as enumerated in the table in the Budget Speech. The Southern African Clothing and Textile Workers' Union, a trade union that operates in the textile industry and an affiliate of Cosatu, and therefore a progressive organisation, stated in its oral presentation during our public hearings that from what they can infer, they can safely say that R7,1 billion's worth of clothing was smuggled, underdeclared or underinvoiced upon arrival in South Africa in order to avoid paying import duties.
Furthermore, to illustrate the seriousness of the topic of customs operations, let me share with you what has been achieved. Amongst others, over the past few years they have been able seriously to detect drugs, endangered species, explosives, and firearms and ammunition entering or leaving the ports of entry as well as illicit CDs, DVDs, tobacco products and counterfeit goods at the ports of entry and mail centres.
The Sars Dog Unit has also enjoyed great success. It detected illicit cigarettes worth R37,8 million; 351 kg of cocaine valued at R90 million; 109 kg of crystal methamphetamine, worth R35,5 million; about 61 000 kg of cannabis goba lebake [marijuana] valued at R2,9 million; counterfeit goods worth R155 million; and counterfeit CDs and DVDs worth R671 million. That explains why in most instances our activists in the cultural sphere, particularly music, happen to die as paupers. This has a very negative impact on our music industry.
Sars opened a Customs Water Wing in Durban during the 2012-13 financial year and has deployed jet skis to patrol the Orange River.
The greatest threat to our manufacturing sector and industrialisation programme remains the illicit trade that undermines our economy, and therefore these control Bills seek to limit places of entry into and exit from the Republic of South Africa. The Bills will regulate places of entry in regard to high-risk goods, which will be limited to specific places of entry and exit, thus allowing Sars officials to focus their enforcement efforts on places where it is most needed. These enforcement provisions are aligned to the provisions of our Constitution, but also give more powers to Sars officials to fulfil their responsibilities and therefore combat the aforementioned illicit trade activities.
The Customs Control Bill includes provisions dealing with the sealing of containers and the prescribing of specific routes of high-risk goods to and from the inland terminals. In regard to the inland terminals, the biggest issue during our public hearings was, and I think will remain, that of terminals like City Deep. Let me set the record straight from the outset. The intention of the Bills before us is not, and never was, to close inland terminals or to disrupt the seamless movement of goods and services. Rather, the intention is to retrieve better information prior to the goods' entering the harbour.
During our public hearings, industry players and trade organisations strongly opposed the proposal regarding the clearance of goods at the first port of entry in respect of goods destined for inland terminals, and made specific proposals to include a definition of inland ports.
Once again, the key question the committee had to confront and give an answer to was to what extent we can contribute to making sure that illicit goods do not find their way from ports of entry to inland terminals. I have already indicated the kinds of goods that sometimes find their way into the country, which include, amongst others, endangered species, explosives, firearms and ammunition. That is very, very dangerous for maintaining peace and stability in our country and making the work of the police easy.
The current customs laws provide for inland terminals and not inland ports, so the new proposed Bills will retain that. The only difference will be that where goods were previously allowed to move inland on the basis of a manifest, the importer will now be required to submit a clearance declaration. This declaration will provide Sars with better information in order to manage the relevant risks that goods crossing our borders pose to the entire country and region.
Extensive time was allowed to parties to consider and submit their proposals and presentations to the Standing Committee on Finance. Several legal interpretations were put before the committee regarding the issue of inland terminals to better clarify our understanding of and the impact of these proposals on international contracts between foreign sellers and local purchasers or importers. This improved our understanding and was very helpful in assisting the committee members to come to a conclusion regarding these issues.
From the Budget Speech it is also clear that global economic recovery will continue to be propelled by emerging economies. Economic growth on the continent is estimated to be around 6%, and therefore it is imperative that we improve our trade environment by improving our infrastructure and efficiency at our ports of entry so that we can be a better place to facilitate trade through our one-stop border facilities with our neighbouring countries.
The Customs Control Bill specifically seeks to provide a legal framework to facilitate the smooth movement of goods at the place of entry or exit in terms of international agreements with adjoining countries. The Bill therefore creates a legal framework for one-stop border posts to facilitate trade between South Africa and the rest of the continent.
As we will recall, Parliament recently ratified the agreement between South Africa and Mozambique for the establishment of a one-stop border post at Lebombo/Ressano Garcia along the Maputo Corridor.
In regard to penalties, various submissions were made regarding the proposed fixed penalty regime, which ultimately culminated in a reduction of the quantum of categories of these penalties and relief for bona fide errors. The Bill distinguishes between two categories of offences, namely more serious and less serious offences. Offences include diversions of goods and other fraudulent practices, such as making false statements and using documents containing false or misleading information. In terms of the Bill, all these will make offenders liable for imprisonment or a fine set out in the Bill.
In conclusion, the Customs Bills lay a solid foundation for the customs administration of goods imported to and exported from South Africa. The Bills support government's strategy to facilitate trade and improve control over goods crossing our borders.
In our current 2014 manifesto we in the ANC have declared that we will work with our partners to ensure increased exports, particularly manufactured and value-added exports. We further say that we will continue to invest in the upgrading and expansion of the country's rail, port and pipeline infrastructure as part of our effort to shift freight transport from road to rail. The ANC supports this move that will take South Africa forward.
The ANC supports the Bills before us. Thank you, hon Speaker. [Applause.]
Hon Speaker, let me try to provide some clarity on some of the things that the hon Mufamadi was trying to get across. Some members might not know this, but for the past 36 years we have had an inland port in Gauteng, called City Deep. It has always allowed a foreign exporter to consign goods to Johannesburg as a final destination. A shipping line takes responsibility for the goods all the way until they are cleared at City Deep. The existence of City Deep lowers the cost of doing business, eases the burden on our ports, and ensures the easy movement of goods to neighbouring countries to our north.
The Bills before us today do many good things to update our customs processes, but some of the things they do risk harming the status of City Deep as a place that goods can travel to in order to be cleared. This, I'm sure you will agree, could have a negative impact on trade and economic growth.
The changes have been made as part of Sars' efforts to tackle fraud and illegal imports. Let me be clear, the DA supports efforts to tackle these things, but we have to balance enforcement with the benefits of free trade.
In the committee it was always treated as a given that the existence of inland ports like City Deep contributes to customs fraud, but the committee never interrogated this fact. What is more, Sars never commissioned a regulatory impact assessment on these Bills, and I think you'll see that the impacts can be quite severe.
What they are doing is to change the current system, where goods are allowed to travel on a manifest all the way to City Deep where the manifest terminates, to a new system where you as an importer have to submit a clearance declaration three days before goods arrive at an actual ocean port like Durban or Cape Town. It is not clear that this new system is the best way to stop customs fraud.
Furthermore, requiring exporters to relinquish control at the first port of entry might threaten trade flows and economic growth, particularly in Gauteng and in the landlocked countries to our north.
Also, all members will know only too well the delays and congestion we already have at ports like Durban, to say nothing of the question of security for containers that may now no longer proceed seamlessly to Johannesburg.
The DA welcomed the fall-back provision in the Customs Control Bill. It was inserted late in the day, but it allows our system to revert to the old system if the new one does not work. We supported this amendment.
However, we also proposed eight other amendments to the Customs Control Bill to try to retain the concept of an inland port in the legislation. Each of our amendments was voted down by the ANC. However, we were supported in these amendments by Business Unity SA, and I believe that that organisation is still concerned about a potential negative effect on the economy from these Bills.
The DA also tabled an amendment to the Customs and Excise Amendment Bill to retain the section that allows carriers to deliver containers to inland ports under bond. That proposal was also outvoted by the ANC members.
The bottom line is that the committee did not adequately interrogate the Bills and that they were rushed through, despite their having been under consideration since 2007. Let me tell you a little about why I say they were rushed.
On 4 February this year, Sars took the committee through a PowerPoint presentation on the Bills. They did not provide us with their written response to the issues raised in the public hearings, nor did they present their final draft amendments to the Bills. We had to wait till the next morning.
At 9:30 the next day, 5 February, these three documents as well as Sars' responses to the public hearings and their final proposals were tabled. The Sars response document is 20 pages long. They have nine amendments to clauses in the Customs and Excise Amendment Bill and 90 amendments to the Customs Control Bill.
I am sure that members will agree that ordinarily a committee should have a full day for members to process these changes and to get their heads around them, but when I asked the chair for a one hour break - one hour! - to process all of these pages, that request was denied, and at 9:45 we moved immediately into a line-by-line processing of the Bills without any idea of what Sars' changes were.
Let me recap. Sars presented their final amendments to the Bills and the memo that described them to the committee minutes before that committee went through the Bill line by line. We had no time to consider the amendments and were forced to respond in the moment, despite our request to the chair to allow a time-out. If we act like this, then our committees are simply rubber stamps for the executive. Hon Speaker, is this the way we should be legislating in Parliament? I'm sure that members on both sides of the House will agree that it is not.
We object to the Customs Control Bill and the Customs and Excise Amendment Bill because, firstly, they have a potentially detrimental effect on trade and growth and, secondly, because the Standing Committee on Finance rammed them through before the committee could fully understand the changes made to 99 clauses at the eleventh hour.
Trade is the lifeblood of our economy and with growth coming in at below 1,9% last year, it's clear we need to boost trade. Any moves we make that could compromise it must be stopped. That is why the DA does not support two out of these three Bills. [Applause.]
Mr Chairperson, we are jointly debating three pieces of legislation today, but I shall confine my comments to the Customs Control Bill, and more specifically to the legal opinion side of it.
On 1 November 2013 Sars briefed Prof G T S Eiselen to give them an opinion on the change of policy under debate today, which requires importers to lodge a national transit declaration to the manifest. This change was a contentious issue at the National Economic Development and Labour Council, Nedlac. Many claimed that the change in policy and the requirement that goods be cleared at the first port of entry, rather than the so-called inland ports, would lead to refusal on the part of carriers to engage in contracts of carriage past the first port of entry, thereby negatively impacting on the so-called inland ports, in particular City Deep, and thus causing delays. Prof Eiselen found that there was no real evidence or substantive argument indicating that.
Sars then briefed another senior counsel, Adv C J Pammenter, on the same issue, as to whether Chapter 9 of the Bill would introduce a change in the existing procedure for the clearing of imported goods destined for the so- called inland ports. He found that this would not happen and there would be no out of the ordinary customs delays. He concurred with Prof Eiselen's opinion.
Then Sars went another mile. They briefed another senior counsel, Adv A P Joubert. He concurred with Adv Pammenter's and Prof Eiselen's views. He found that all fears raised by the concerned commentators had been allayed by Sars. Sars, and in particular Kosie Louw sitting in the benches behind me, must be commended for having sought three very well respected lawyers' opinions on the contested issues in this Bill. Maybe Business Unity SA should have employed lawyers and not accountants to advise them on this Bill.
I am happy that it will be very wise to support the change of policy according to the Bill. City Deep is safe and Johannesburg needs to know that.
The Southern African Clothing and Textile Workers' Union presented a very practical submission to the committee on the impact there will be, if we do not change the Bill. Customs fraud is a very big and serious issue in South Africa. Every day fraudulently imported goods are sold in South Africa. This leads to job losses and robs the fiscus of income. For instance, and the hon Mufamadi referred to this, the total clothing imports coming from China to South Africa, and declared by China in 2012, was valued at R14,8 billion. However, South Africa only declared R7,7 billion. So, underdeclared clothing of R7,1 billion entered our shores from China. That means we have lost roughly R3,2 billion on these imports in 2012 alone. It is about time to introduce new measures, and Cope will support all three pieces of legislation.
Chairperson, the Customs Control Bill seeks, and I quote:
To provide for customs control of all vessels, aircraft, trains, vehicles, goods and persons entering or leaving the Republic; to facilitate the implementation of certain laws levying taxes on goods and of other legislation applicable to such goods and persons ...
Whilst we understand and support the idea of greater customs control by our officials, we also recognise the possible delays and associated costs such measures could cause to the import industry. This is a delicate balancing act that must be workable for all parties involved and must be to the end benefit of South Africa and South Africans as a whole.
It is also imperative that South Africa keeps pace with global trends in trade, conventions and international best practice, and exercises far greater control over the inflow of unwanted goods. In this regard, we applaud the introduction of the advance cargo loading notice which effectively prevents the loading of prohibited goods on vessels destined for South Africa.
I now turn to the Customs and Excise Amendment Bill, which will change the name of the Customs and Excise Act, Act 91 of 1964; and amend the Customs and Excise Act so as to delete all provisions dealt with by the Customs Control Act applicable to customs control of imported goods and goods to be exported as well as the imposition, collection and refunding of customs duties; and other matters relating to customs duties.
These Bills seek to effect a general upgrade in our entire import system in order to close loopholes, address concerns and provide a workable platform for both business and government going forward. The IFP supports the Bill. Thank you. [Applause.]
Chairperson, hon Ministers and Deputy Ministers, as well as my colleagues, hon members, at our 52nd ANC National Conference we resolved that, and I quote:
The building of small and micro enterprises is also a critical developmental challenge, which requires the state to deploy resources to build capacity and institutions. The mobilisation of small businesses into co-operative organisations is a critical part of the solutions to this challenge. So is the education of our people in entrepreneurial skills, the provision of financial support and training to small businesses. At the same time we should ensure that fundamental worker rights are protected in small enterprise.
The ANC's medium-term economic policy strategy continues to be driven by the New Growth Path, an economic policy strategy designed to shift the trajectory of economic development through identifying drivers of job creation.
Hon Harris, whilst you were planning and being obsessed with the march to Luthuli House, committed members of this committee found revelations in these three Bills. The first revelation we found is that they support small, medium and micro enterprises, SMMEs, and they also support our broad- based black economic empowerment, BBBEE. The Bills further align themselves with the shift in focus of SMMEs and BBBEE policies to the development of entrepreneurs providing productive inputs into the real economy rather than shareholder transactions. The Bills align themselves with the building of co-operative institutions and other forms of social ownership.
The Customs Control Bill, as an example, hon Harris, is flexible in that it caters for measures to support SMMEs. In this regard the commissioner is empowered to prescribe licensing requirements that could include requirements responsive to the size or turnover of a particular business.
The application fees for advanced rulings will be lower for small businesses in order to facilitate compliance and also to encourage the participation of small businesses in the processing of goods.
The Bills allow for a conducive environment whereby SMMEs can grow. They provide for exemption from the licensing of premises where subcontracted processing is carried out, if the annual business turnover of those premises does not exceed a prescribed amount.
The Bills allow for a simplified registration process available to small businesses.
The Bills will promote exports and business competitiveness, boosting local manufacturing and helping small businesses to grow.
Practically, these Bills will feed into the economic success and sustenance of our real economy. They will provide an anchor for increased participation of small business in the mainstream economy.
Small businesses, as we are all aware, are a driving force for economic growth and development. Their dynamism and ability to innovate assist in creating much-needed jobs in our economy. Besides creating employment, they also help diversify economic activity and make a significant contribution to exports and trade.
Small businesses are a vehicle to ensure economic inclusivity and increased participation by South Africans in the mainstream economy. There has been acceleration in the delivery and upscaling of support, particularly to black-owned, rural and township small businesses, as well as co-operative progress.
The continued monitoring of the business environment and undertaking regulatory reviews to ensure sustainable small business development will also be a key focus.
Support services addressing the challenges faced by black and women entrepreneurs is another key area of focus in broadening economic inclusion and promoting transformation in the economy.
It is the people's government, the ANC government, that has continued to build entrepreneurial capacity in order to address the socioeconomic challenges that are facing our people. We in the ANC have been resolute in increasing the uptake of small businesses, as their dynamism and ability to innovate will assist us in creating the much needed jobs in our economy.
In conclusion, the three Customs Bills before this House today, I argue, will go a long way in assisting the small business sector to play an increasingly important role as an engine for economic growth and provide opportunities for aspiring entrepreneurs, especially those who are unemployed.
The ANC supports these Bills. Ke a leboga. [I thank you.]
Hon Chairperson, South Africa changed its political landscape 20 years ago and we need, indeed, to shift towards a second transition - economic emancipation for the poor and destitute.
We are not compelled to operate with outdated pieces of legislation which are not suitable for the current economic climate. This is precisely why the Customs Control Bill and Customs Duty Bill are relevant to modernising our customs procedures and bringing this integral part of the trade and investment sector into line with international norms and standards. We laud the efforts of the Minister in this regard.
The DA is stuck in an old apartheid mentality and will argue against various aspects of the Bills ...
Chairperson, I would like to know if the hon member will take a question. [Interjections.]
Hon Chairperson, I will do that at the end.
As I have said, the DA is stuck in an old apartheid mentality and will argue against various aspects of the Bill, not because they disagree, but because they will do anything to undermine a good process undertaken by the ruling party. [Interjections.]
The Bill provides a balanced approach, with necessary procedures to curb illegal trade, while it also facilitates an efficient process to prevent unnecessary issues with the importing or exporting of goods. Establishing a healthy trading climate with international partners is crucial. However, the MF cautions that this must be done in a responsible manner so that no one has free rein to undermine our laws with trade in illegal and harmful goods.
This Bill provides sufficient mechanisms to deal with a breach of the law by putting in place proportional responses to prosecutable and nonprosecutable offences. Furthermore, mechanisms for appeal or internal reconsideration of penalties will add impetus to the system to function in a more just manner.
Consultation regarding the Bill stretches as far back as 2007. This demonstrates the department's commitment to ensuring that the new Bill is a step absolutely in the right direction.
Criticism regarding the Bill has been lodged by the DA all along in connection with the fact that it prescribes that imported goods have to be cleared and released at the first port of entry. [Interjections.] Well, of course, they believe it will have a negative impact on the congestion of the coastal ports and that the container terminal of City Deep in Johannesburg will fall into disuse. This is despite the fact that reassurances have been given by Sars, as well as various international law experts and advocates, that the operation at City Deep will not be jeopardised and that the new system is definitely a step in the right direction.
This shows that some people like the DA will criticise just for the sake of criticising. [Interjections.] The DA is all about this. Perhaps we should parade them - yes, indeed - and make them award winners for a lack of constructiveness. [Interjections.] What are they really doing? Why don't they actually do something constructive for our country? [Interjections.]
Under the new Bill our officials will have better control mechanisms in their toolkit to curb fraud and illicit trading, while also lending more predictability to the supply chain.
The MF will support the Bills. [Time expired.] [Applause.]
Chairperson, let me start by mentioning that I can't recall having seen the hon Bhoola at any of the committee meetings for the past three years. It was a powerful presentation, but unfortunately, there was no substance to it. [Interjections.] The Customs and Excise Amendment Bill replaces the Customs and Excise Act, Act 91 of 1964. It also allows government to monitor and control the movement of goods and people into and out of South Africa.
The most controversial aspect of this Bill is that it revokes the current acceptance of a carrier manifest as a declaration to customs for the inbound seamless movement of containerised cargo. This will give Sars more powers to fight illegal imports by requiring a ship's manifest to terminate at an ocean port to prevent fraud on the rail and road routes to Johannesburg. However, there are very real concerns that this could have a detrimental effect on the inland container terminals, such as at City Deep in Gauteng.
Our policy position in the DA is very clear. We are in favour of free trade and economic growth. While we believe we need to be able to police effectively for customs fraud, we need to balance this power - as my colleague has indicated - with the interests of the economy and trade, and it is not clear that this Bill does exactly that.
During deliberations Sars did not demonstrate that they would prevent more fraud by clearing goods at the first port of entry. We understand that Sars wants to implement measures to prevent fraud, but we think it is too high a risk to impede the logistic flow when it is uncertain whether these measures will make any real difference. We cannot support the fact that goods might no longer be able to pass directly through to Johannesburg to be cleared. We believe the need for more information to assist Sars to make a risk assessment can be prescribed in the rules and regulations.
In a presentation to the committee, the Johannesburg Chamber of Commerce and Industry, through Mr Corbin, said the following:
While ... other comments and suggestions relating to the Bill were adequately dealt with, this remains the one disagreement that has not been ... resolved.
They continued:
The implementation of the new Bill would directly impact the City Deep container terminal, which has been operating as an inland port for the past 35 years, alleviating pressure from the already-constrained coastal ports.
In our finance committee meeting this morning we heard a presentation from the Manufacturing Circle that indicated that congestion at the ports is still problematic. We therefore support the inclusion of a fall-back clause. I think that is a step in the right direction. That should practically alleviate some of the problems at the ports.
However, it is unfortunate that Sars' written response to the presentation and to our amendments was very late. A verbal apology was made to me on the morning of the very last day, when the 99 amendments were presented. They were presented only on the last day, which was very unfortunate, as it is just impossible to deal with that amount of legislation at the last minute before we deal with it line by line. I think the chairperson of the committee will remember that incident very vividly.
The committee needs a culture of tolerance, I believe, to see to it that we at least present the best meaningful legislation on this important matter and not compress timeframes for members who would really like to make a meaningful input at that point in time.
I must say, Mr Van Rooyen's statement with regard to Luthuli House is a rather unfortunate and misplaced one. Mr Van Rooyen is a good politician, but I certainly think he missed the point completely in this regard.
We as the DA tabled eight amendments to the Bill to try to retain the concept of an inland port in this legislation. Each of them was voted down by the committee. So, there was no real feeling of co-operative governance or attitude of "let's present the best legislation that we can". Simply put, when there is a DA proposal, made by the hon Harris, it is voted down.
We were supported in drafting these amendments by Business Unity South Africa. They were concerned about the potential negative effect on the economy and perhaps changing the status of the inland port, City Deep.
The DA therefore cannot support this Bill. I thank you, Chair.
Hon Chairperson, hon Minister Gordhan, hon Deputy Minister Nene, hon Ministers, Deputy Ministers, Members of Parliament, distinguished guests and viewers at home, the South African government has taken crucial steps over the past four years to build up and implement a strong policy framework intended to address the country's developmental priorities.
According to Sars, the rapid growth in illicit trade such as counterfeit goods, undervalued textiles and clothing originating from the east, in particular, continually erode South Africa's revenue base and was the main cause of the closure of the clothing and textile factories and numerous job losses. As hon Thaba Mufamadi has said, the illicit economy is a major concern. Illegal imports and underinvoicing provide a grossly unfair advantage to manufacturers in other jurisdictions and must be stopped.
The Licensing of Businesses Bill speaks to the issue of illicit and illegal goods, because it is focused on stamping out South Africa's significant illicit economy. We have a significant illicit economy in this country which is damaging to the prospects of small businesses, as hon Van Rooyen has said. This is the economy of illegal imports and trade in substandard products. This is the economy of people who do not pay VAT and so on, and then compete unfairly with people who observe all these requirements.
A set of new Customs Bills is currently before Parliament and will seek to strengthen the legal means available to Sars to execute its mandate in today's environment. This process is taking into account identified needs to do with enforcement and investigations, and the imposition of punitive measures by way of a predetermined penalty regime.
The primary aims of the Bill are set out in section 3 as follows:
a) to provide systems and procedures for customs control of all goods and persons entering or leaving the Republic;
b) to enable the effective collection of ... tax on such goods ...
... imposed in terms of the tax levying Acts; and
c) to facilitate the implementation of ...
(ii) other legislation applicable to such goods or persons.
The Bill facilitates the implementation of other legislatures' prohibiting, restricting or regulating the import or export of certain goods, and for that reason direct powers are assigned to customs to detain and deal with goods categorised as prohibited, restricted or sectorally controlled goods. The Bill provides for the detention of suspected counterfeit goods and the procedures to be followed when such goods are detained.
Nedlac facilitated constructive negotiations resulting in the Customs Bills, including: harsher penalties for customs offenders; naming and shaming of customs offenders; suspending, revoking and withdrawing import licences of customs offenders; disposing of seized goods in a manner that does not undermine local production and additional customs capacity; and placing limitations on ports of entry.
The clothing, textile, leather and footwear sectors play an important role in the South African economy. These are strategic economic sectors that require significant attention, given their potential to create jobs and grow the domestic economy. Government has introduced incentive schemes - production incentives will be increasingly grant-based, thus reducing reliance on tax incentives - to boost manufacturing capacity and support job creation.
Sars will impose the most punitive measures possible in respect of its penalty regime on offenders, including, but not limited to, maximum penalties, forfeiture and seizure of goods found to be in contravention of the law.
A highlight of the industry is that it is a significant employer of women and of people in communities where few other employment opportunities exist. It is estimated that 94% of workers in the industry are black, that is African, Indian and Coloured, and many are located in decentralised rural areas. This means that any job losses or employment growth will have a disproportionate impact on black women and woman-headed households.
I would like to thank the committee chairperson, hon Thaba Mufamadi, and hon Van Rooyen for having the patience that they do have with the committee.
Now, hon Harris, let me respond to you. We need to compliment Sars for ensuring that they consulted three senior legal counsel for their opinions on this matter. That shows the capacity that Sars has in regard to the issue.
Prof G T S Eiselen said:
The term "inland port" ... is not an official customs term ... It is not any term or official status accorded to such facilities in the terms of the current customs legislation.
Hon Koornhof made mention of this, saying that perhaps the opposition should have consulted lawyers rather than consulting economists for them to get a greater understanding of the legislation. We thank you, hon Koornhof, for mentioning that.
Hon Harris did not even attend the public hearings. On the public hearing days he came and took the committee aback with proposals to amend the legislation. Then he realised that his proposals were not finding ... [Interjections.]
Chairperson, I rise on a point of order: The member is misleading the House. I was in attendance on both days of the public hearings.
Hon member, you may continue.
Hon Chairperson, the hon member was not at the public hearings, and I repeat that. The hon member requested the hon Ross to make those amendments. He then came the following day and wanted to take the committee back. He told the committee that they needed to take cognisance of all the amendments.
Chairperson, I rise again on a point of order: The member is misleading the House, and the record will reflect that I attended the public hearings ... [Inaudible.]
Let us wait for the record.
Mr Chairperson ...
Hon Masutha, will you take your seat, please?
Hon member, whether you attended the public hearings or not is neither here nor there. It is not a requirement of the House for anyone to attend a specific meeting or to participate in a debate or not. That is something that must be sorted out. I am not in a position to rule on a matter that I don't have the details of.
Chairperson, may I address you on that point of order? The member is saying that our member, hon Harris, is ... [Interjections.]
Hon member, I heard what hon Harris said. From the point where I am ...
But the member at the podium is misleading the House.
Hon member, will you take your seat, please? From where I am sitting, it is impossible to determine the correctness or not of the statement that the member has made and the challenge by Mr Harris. We will check the records and, if need be, we will come back to the House.
Hon Masutha, is it on the same matter? We want to continue with the debate.
Chairperson, I just wish to indicate that that point can never be a point of order anywhere.
Thank you, hon member. Continue, hon member.
Thank you, hon Chairperson. In the committee we were taken aback - it was almost as if we were in some kindergarten! We were told to take proposed amendments that were baseless to start with. We could not take those baseless proposed amendments that were made by the opposition.
Here is advice for the DA. Perhaps they should look into their deployment of shadow Ministers because, if they are to take Minister Gordhan, Deputy Minister Nene, hon Mufamadi, hon Van Rooyen and members of the ANC in the committee to task on finances, they should really rethink the deployment of their shadow Ministers.
It is important for us to ensure that we learn from the old people. Hon Koornhof made tangible submissions to the committee.
Mhlawumbe kumele sikusho lokhu indlela ibuzwa kwabaphambili. Ezinye izinto abanye abantu bafuna ukusifaka phezulu, ayisebenzi ngaleyo ndlela leyo. (Translation of isiZulu paragraph follows.)
[I need to say that we must learn from the old people. Some people want to just include some things anyhow, but that is not how things are done.]
So, all I'm saying is that it is important for us to know that the technical amendments that the hon member has alluded to were just technical issues and were not substantiated matters that we were speaking to.
Let me thank hon Nkobo of the IFP for the support. As far as the issue of the delay and the cost are concerned, it has been said that there will be no delay whatsoever. Sars will implement the use of efficient electronic systems to ensure that the delay issue is addressed and the risk of the buyer and seller is not liable.
Hon Van Rooyen mentioned that the Bill elevates small business's entrepreneurial capacity to grow the economy of South Africa and this is carefully noted.
Hon Bhoola is quite correct to say that others will oppose for the sake of opposing. The DA has no substantive argument to put forward on these three Bills; all opposition parties are in support and it is not surprising that they are the only ones who are not supporting it. Unfortunately, they did not receive proper information in regard to the Bills. The ANC is very comfortable with the Bills and it is supporting them.
Lo okhulumayo umalokazana kaShabalala, uMshengu, udonga lamavuso, isidwaba siluthuli, ingonini yasemavanini. Ngithi lona-ke uMka Shabalala, uMshengu kaNathi. UKhongolose uyayiseka le mithethosivivinyo. Siyaphambili, siyaqhuba, yehlisani umoya! [Ihlombe.] (Translation of isiZulu paragraph follows.)
[The speaker here is a daughter-in-law of the Shabalalas, Mshengu, udonga lamavuso, isidwaba siluthuli, ingonini yasemavanini (praise names of the Shabalala clan). This is Shabalala's wife, a Mshengu who is Nathi's wife. The ANC supports these Bills. We are moving forward, we are progressing Calm down! [Applause.]]
Hon Chairperson, I have a point of order: I just want to say that my member said he was not one of the "old" members in that committee. He is not that old.
Hon member, I did not recognise you!
Chairperson, I would like to express my thanks to all political parties and members of the committee who supported this legislation.
Hon Harris, you should really be reconsidering your position. You serve on the committee. If you were present, then why, out of all the members, are you the only one - the only one - who is so confused? There must be something wrong with your listening skills.
This year the Customs and Excise Act of 1964 will be 50 years old - 50 years old! It has not kept pace with the changes in the customs environment of balancing trade facilitation with control, as well as with the changes to the global trade environment in which business is conducted. There has been rapid and irreversible growth in the use of information technology and the exchange of electronic data.
This Customs and Excise Amendment Bill seeks to provide a sound, clear and logical legislative framework that replaces this old, archaic Act of 1964. It provides for the imposition, assessment, payment and recovery of customs duties. As most members have repeatedly mentioned this, we are saying this again in order to help the only hon member who is still confused. The Bill also creates a platform for a modern customs administration that plays a critical role within the context of international trade and tourism.
Effective customs control secures revenue recovery, facilitates legitimate trade and protects society at large. Unlike the hon Harris who actually espouses an ideology that says that as long as you get jobs, as long you get imports, even if those imports are illegal, even if those imports are ... [Interjections.] That is exactly what he was espousing here! He said that even if those imports come at the expense of our own customs, even when there is underdeclaration - something everybody has spoken about - it doesn't matter, as long as he gets those imports.
Chair, on a point of order: ...
Other customs ...
Hon Deputy Minister, just give me an opportunity. Yes, hon member?
Chair, I rise on point of order in terms of Rule 69: It is my view that the Deputy Minister is misquoting my speech and I would like to have an opportunity to explain.
Hon member, we are busy with a debate. This is a matter of a debate that is taking place; it's not a point of order. Hon Deputy Minister, please continue?
It is a point of order!
Excuse me, Chair ...
Thank you, Chair. [Interjections.]
Hon Minister, please continue?
Chair, I am rising on a point of order: In terms of Rule 69, an explanation during debate is ... [Interjections.]
Hon member! Hon member, I did not ask you to read the Rule to me. I said that we were debating a matter. The Deputy Minister has a particular view that he is putting forward. This is part of normal debating and we will continue with the debate. Yours is not a point of order. Continue, hon Deputy Minister.
Chair, when this hon member came here, he said that he was trying to clarify things. Instead, he continues to confuse them even more.
He also claims to represent the inland terminals and he mentions City Deep. I must assure you that City Deep is convinced about this legislation, and three legal opinions have confirmed that there is no such thing as what he was trying to put before this House. City Deep is a container terminal today, and it will remain a container terminal in terms of this new legislation. The shipping lines have confirmed that they will issue bills of lading to City Deep. The goods will still move seamlessly from the first port of entry to City Deep.
So, who does he represent? He stands here and claims to be representing City Deep and furthermore says that there will be unintended consequences. I can assure you that everybody who stands to benefit from this legislation, including the South African Association of Freight Forwarders and Transnet, supports these proposals because they do precisely what we seek to achieve through this legislation before us.
I want to make it known that the statement that Sars want to close inland terminals is entirely not true. We have internal terminals today, as I have said - and City Deep is one of them - and we will continue to have them in terms of the Customs Control Bill.
The issue at stake here is the fact that goods move on a manifest. A manifest is just a list of containers. Such a list does not provide adequate information about the goods from the first port of entry to an inland terminal. We are now seeking to get that information at the first port of entry. The information on the manifest is furthermore based on unsubstantiated information which is supplied by the carrier or by a person in a foreign jurisdiction who cannot be held accountable for the information supplied.
All these concerns have been addressed. That is why all members of the committee who were present, both in spirit and in physical form, know that these things have been dealt with. Whatever the case may be, your absence is quite obvious, hon member, because if you had been there, you wouldn't have been making the statements you have made. On the day that you were absent from the committee, we had among us a slightly more sober member, Mr Ross, who understood. However, when you came in, you realised that your absence had left space for common sense to prevail and you wanted to take us back. [Laughter.]
Let me dispel the notion that you continue to stand in support of the values and issues that we have put in the National Development Plan, which are: giving support to small businesses; creating employment; facilitating trade; and fighting crime, corruption and customs fraud. You have spoken against all those things here today. I think you are following very correctly in the steps of your leader who, in Friday's Cape Times, is quoted as saying:
... if the ANC wants to supply this completely false logic of saying that if the money comes from the central fiscus it must be ANC projects and ANC delivery, well why do they not just continue that false logic a little bit backwards and do a pro rata analysis of which party's supporters pay ... tax ...
She believes that it is the DA supporters that pay the tax! That's unbelievable! This was in Friday's Cape Times! I just couldn't believe it! But this is the mentality that you continue with and you have confirmed that. You don't take into account that we all pay tax in some way: some pay personal income tax, some pay VAT, some pay company income tax, and some pay sin taxes, like the smokers and the drinkers - maybe those are your DA members, or who you think are your members - who pay excise duties on liquor and cigarettes. Motorists pay tax, businesses pay skills levies, etc. We pay all sorts of taxes. Today we are dealing with customs, and it doesn't come from the DA by any measure. I want to take this opportunity to thank all the members of this House, the chairperson of the committee for his leadership, the Portfolio Committee on Finance, and all the members of the portfolio committee - except one hon member who completely lost it in the committee. I want to submit that these Bills will go a long way towards bringing about the transformation in this area that we all yearn for. Thank you very much, hon Chair. [Applause.]
Debate concluded.
Customs Duty Bill read a first time.
Customs and Excise Amendment Bill read a second time (Democratic Alliance dissenting).
Customs Control Bill read a second time (Democratic Alliance dissenting).