On 1 April 2018 South Africa introduced the Health Promotion Levy (Sugar Tax) which directly impacts manufacturers of sugary beverages. Find FTI’s latest thought leadership paper attached, highlighting complexities and anomalies facing South Africa’s FMCG industry.
What is Value Added Tax (VAT)?
**An indirect tax imposed at each stage of production and supply.
**In general, the ultimate consumer is the one who bears the full cost of this tax while the business collects and
calculates the tax and pays it in favor of the state.
**A 5% is imposed on multiple production stages with the right to deduct taxes on inputs from taxes collected
from production outputs.
**The tax is collected each stage of the economic cycle (production, distribution, consumption)
Value added = Sale Price – Purchasing or Production cost
The UAE government introduced excise tax on carbonated drinks, tobacco products and energy drinks in 2017 and has decided to charge the same on e-cigarettes, e-liquids and several soft drinks, commencing from December 1, 2019.
Afrox investor & analyst presentation half-year results 2016 Simon Miller
Afrox held its investor and analysts presentation for half-year results to 30 June 2016 at its head office at Afrox House in Johannesburg on 8 September 2016.
What is Value Added Tax (VAT)?
**An indirect tax imposed at each stage of production and supply.
**In general, the ultimate consumer is the one who bears the full cost of this tax while the business collects and
calculates the tax and pays it in favor of the state.
**A 5% is imposed on multiple production stages with the right to deduct taxes on inputs from taxes collected
from production outputs.
**The tax is collected each stage of the economic cycle (production, distribution, consumption)
Value added = Sale Price – Purchasing or Production cost
The UAE government introduced excise tax on carbonated drinks, tobacco products and energy drinks in 2017 and has decided to charge the same on e-cigarettes, e-liquids and several soft drinks, commencing from December 1, 2019.
Afrox investor & analyst presentation half-year results 2016 Simon Miller
Afrox held its investor and analysts presentation for half-year results to 30 June 2016 at its head office at Afrox House in Johannesburg on 8 September 2016.
ITC Q1FY15 results in line with estimates; buy - HDFC SecIndiaNotes.com
ITC’s Q1FY15 results (Y-o-Y) were in line with our estimates. Cigarettes volumes declined for fifth straight quarter by ~2-3%. However, this was on expected lines. Steep price hikes initiated supported the overall growth, which remained in high double digits.
- Transfer pricing reporting requirements
- VAT on internet selling
- Internet intermediary obligations
- Restricted stock unit rule changes
- Refund claim against 3% tax on dividend distributions
- France-Luxembourg tax treaty
- Dividend distributions by tax group members
- Employees seconded to France
- Allowable interest on shareholder loans
- C3S threshold changes
- Retail software obligations
International Indirect Tax survival in a global supply chain Alex Baulf
The profitability of a business is directly impacted by how its supply chain makes and delivers goods, as well as by how that supply chain is structured to minimize trade and tax expenses
Economic and technical developments drive change for businesses. As a business moves through its own life cycle ,the supply chain will also evolve, as procurement, manufacturing and distribution strategies change.
The pace of change in the international tax environment is accelerating, as governments and tax administrations get to grips with BEPS. These developments will require businesses to react on a strategic and organisational level.
Such changes invariably have an impact on VAT/GST and customs obligations. As the business reacts to changes in the external environment, it needs to revisit the design and operation of the supply chain at transaction level.
This thought leadership from Grant Thornton explores both the indirect tax supply chain life cycle and the challenges, risks and opportunities at every stage within the supply chain.
New composition scheme of tax of 5 percent under delhi vatTaxmann
A new composition scheme has been notified under the Delhi VAT Act Vide Notification No. F.3(29)/Fin(Rev-I) 2015-2016/dsvi/93 dated 18.3.2016 with effect from 1.4.2016 for every registered dealer -
Excise Tax in UAE – Scope Expansion.pdfFiyona Nourin
In UAE, tobacco and tobacco products, Energy Drinks and Carbonated drinks are subject to Excise tax and the nation has now decided to levy excise tax on all e-cigarettes, e-liquids and sweetened drinks with effect from December 1, 2019
ITC Q1FY15 results in line with estimates; buy - HDFC SecIndiaNotes.com
ITC’s Q1FY15 results (Y-o-Y) were in line with our estimates. Cigarettes volumes declined for fifth straight quarter by ~2-3%. However, this was on expected lines. Steep price hikes initiated supported the overall growth, which remained in high double digits.
- Transfer pricing reporting requirements
- VAT on internet selling
- Internet intermediary obligations
- Restricted stock unit rule changes
- Refund claim against 3% tax on dividend distributions
- France-Luxembourg tax treaty
- Dividend distributions by tax group members
- Employees seconded to France
- Allowable interest on shareholder loans
- C3S threshold changes
- Retail software obligations
International Indirect Tax survival in a global supply chain Alex Baulf
The profitability of a business is directly impacted by how its supply chain makes and delivers goods, as well as by how that supply chain is structured to minimize trade and tax expenses
Economic and technical developments drive change for businesses. As a business moves through its own life cycle ,the supply chain will also evolve, as procurement, manufacturing and distribution strategies change.
The pace of change in the international tax environment is accelerating, as governments and tax administrations get to grips with BEPS. These developments will require businesses to react on a strategic and organisational level.
Such changes invariably have an impact on VAT/GST and customs obligations. As the business reacts to changes in the external environment, it needs to revisit the design and operation of the supply chain at transaction level.
This thought leadership from Grant Thornton explores both the indirect tax supply chain life cycle and the challenges, risks and opportunities at every stage within the supply chain.
New composition scheme of tax of 5 percent under delhi vatTaxmann
A new composition scheme has been notified under the Delhi VAT Act Vide Notification No. F.3(29)/Fin(Rev-I) 2015-2016/dsvi/93 dated 18.3.2016 with effect from 1.4.2016 for every registered dealer -
Excise Tax in UAE – Scope Expansion.pdfFiyona Nourin
In UAE, tobacco and tobacco products, Energy Drinks and Carbonated drinks are subject to Excise tax and the nation has now decided to levy excise tax on all e-cigarettes, e-liquids and sweetened drinks with effect from December 1, 2019
Alco-beverages industry to be adversely hit by exclusion from GST - Dr Sanjiv...D Murali ☆
Alco-beverages industry to be adversely hit by exclusion from GST - Dr Sanjiv Agarwal - Article published in Business Advisor, dated March 25, 2017 - http://www.magzter.com/IN/Shrinikethan/Business-Advisor/Business/
Presentation on updates of VAT in UAE is in line with the various advisories issued by Ministry of Finance along with the expert views. VAT is being implemented in the UAE wef 1st January 2018. Presentation has impact of VAT/ Steps to follow to become VAT compliant/ thresholds for VAT registration with process to be followed.
Incorporating Value Added Tax (VAT) functionalities to your existing ePROMIS ...ePROMIS Solutions
Value Added Taxation would have an impact on your entire business processes from the point of sales, invoicing, accounting, and reporting. Whether your Enterprise Resource Planning is an in-house system or a globally renowned software, it will need to be enhanced and modified incorporating all aspects of VAT implementation. ePROMIS VAT incorporation program will allow organizations to have tax functionalities in their existing ePROMIS ERP software systems.
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How doing business in Brazil is a basic summary of tax and corporate aspects international entrepeuners and executives need to understand on their strategic planning phase to enter in Brazil. We recomend as best practice request assistance to experts in order to carry out their business in compliance and adding value to your business.
Grant Thornton China tax bulletin - January 2015Alex Baulf
China Tax Bulletin aims to provide a prompt and high level overview on the latest tax rules released by various authorities, especially those by China SAT and local tax authorities. Implications for your business are also presented for the tax rules
We make VAT Reporting in GCC countries very easy. Read our free VAT guide for a step-by-step walkthrough of how to use Tax reporting tool by Azdan to solve the Value Added Tax in GCC countries.
#New Scheme of Export Incentive RoDTEP - By SN Panigrahi & CA Rishabh Sawansu...SN Panigrahi, PMP
#New Scheme of Export Incentive RoDTEP - By SN Panigrahi & CA Rishabh Sawansukha (Jain),
Certain Taxes / Duties / Levies Not Being Refunded @ Present,
MEIS, RoSCTL, RoDTEP
Seminar: Gender Board Diversity through Ownership NetworksGRAPE
Seminar on gender diversity spillovers through ownership networks at FAME|GRAPE. Presenting novel research. Studies in economics and management using econometrics methods.
Turin Startup Ecosystem 2024 - Ricerca sulle Startup e il Sistema dell'Innov...Quotidiano Piemontese
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how to sell pi coins in Hungary (simple guide)DOT TECH
If you are interested in selling your pi coins, i have a verified pi merchant, who buys pi coins and resell them to exchanges looking forward to hold till mainnet launch.
Because the core team has announced that pi network will not be doing any pre-sale. The only way exchanges like huobi, bitmart and hotbit can get pi is by buying from miners.
Now a merchant stands in between these exchanges and the miners. As a link to make transactions smooth. Because right now in the enclosed mainnet you can't sell pi coins your self. You need the help of a merchant,
i will leave the what'sapp contact of my personal pi merchant below. 👇
+12349014282
how to sell pi coins in South Korea profitably.DOT TECH
Yes. You can sell your pi network coins in South Korea or any other country, by finding a verified pi merchant
What is a verified pi merchant?
Since pi network is not launched yet on any exchange, the only way you can sell pi coins is by selling to a verified pi merchant, and this is because pi network is not launched yet on any exchange and no pre-sale or ico offerings Is done on pi.
Since there is no pre-sale, the only way exchanges can get pi is by buying from miners. So a pi merchant facilitates these transactions by acting as a bridge for both transactions.
How can i find a pi vendor/merchant?
Well for those who haven't traded with a pi merchant or who don't already have one. I will leave the what'sapp number of my personal pi merchant who i trade pi with.
Message: +12349014282 VIA Whatsapp.
#pi #sell #nigeria #pinetwork #picoins #sellpi #Nigerian #tradepi #pinetworkcoins #sellmypi
BONKMILLON Unleashes Its Bonkers Potential on Solana.pdfcoingabbar
Introducing BONKMILLON - The Most Bonkers Meme Coin Yet
Let's be real for a second – the world of meme coins can feel like a bit of a circus at times. Every other day, there's a new token promising to take you "to the moon" or offering some groundbreaking utility that'll change the game forever. But how many of them actually deliver on that hype?
Financial Assets: Debit vs Equity Securities.pptxWrito-Finance
financial assets represent claim for future benefit or cash. Financial assets are formed by establishing contracts between participants. These financial assets are used for collection of huge amounts of money for business purposes.
Two major Types: Debt Securities and Equity Securities.
Debt Securities are Also known as fixed-income securities or instruments. The type of assets is formed by establishing contracts between investor and issuer of the asset.
• The first type of Debit securities is BONDS. Bonds are issued by corporations and government (both local and national government).
• The second important type of Debit security is NOTES. Apart from similarities associated with notes and bonds, notes have shorter term maturity.
• The 3rd important type of Debit security is TRESURY BILLS. These securities have short-term ranging from three months, six months, and one year. Issuer of such securities are governments.
• Above discussed debit securities are mostly issued by governments and corporations. CERTIFICATE OF DEPOSITS CDs are issued by Banks and Financial Institutions. Risk factor associated with CDs gets reduced when issued by reputable institutions or Banks.
Following are the risk attached with debt securities: Credit risk, interest rate risk and currency risk
There are no fixed maturity dates in such securities, and asset’s value is determined by company’s performance. There are two major types of equity securities: common stock and preferred stock.
Common Stock: These are simple equity securities and bear no complexities which the preferred stock bears. Holders of such securities or instrument have the voting rights when it comes to select the company’s board of director or the business decisions to be made.
Preferred Stock: Preferred stocks are sometime referred to as hybrid securities, because it contains elements of both debit security and equity security. Preferred stock confers ownership rights to security holder that is why it is equity instrument
<a href="https://www.writofinance.com/equity-securities-features-types-risk/" >Equity securities </a> as a whole is used for capital funding for companies. Companies have multiple expenses to cover. Potential growth of company is required in competitive market. So, these securities are used for capital generation, and then uses it for company’s growth.
Concluding remarks
Both are employed in business. Businesses are often established through debit securities, then what is the need for equity securities. Companies have to cover multiple expenses and expansion of business. They can also use equity instruments for repayment of debits. So, there are multiple uses for securities. As an investor, you need tools for analysis. Investment decisions are made by carefully analyzing the market. For better analysis of the stock market, investors often employ financial analysis of companies.
5 Tips for Creating Standard Financial ReportsEasyReports
Well-crafted financial reports serve as vital tools for decision-making and transparency within an organization. By following the undermentioned tips, you can create standardized financial reports that effectively communicate your company's financial health and performance to stakeholders.
What website can I sell pi coins securely.DOT TECH
Currently there are no website or exchange that allow buying or selling of pi coins..
But you can still easily sell pi coins, by reselling it to exchanges/crypto whales interested in holding thousands of pi coins before the mainnet launch.
Who is a pi merchant?
A pi merchant is someone who buys pi coins from miners and resell to these crypto whales and holders of pi..
This is because pi network is not doing any pre-sale. The only way exchanges can get pi is by buying from miners and pi merchants stands in between the miners and the exchanges.
How can I sell my pi coins?
Selling pi coins is really easy, but first you need to migrate to mainnet wallet before you can do that. I will leave the what'sapp contact of my personal pi merchant to trade with.
+12349014282
Yes of course, you can easily start mining pi network coin today and sell to legit pi vendors in the United States.
Here the what'sapp contact of my personal vendor.
+12349014282
#pi network #pi coins #legit #passive income
#US
What price will pi network be listed on exchangesDOT TECH
The rate at which pi will be listed is practically unknown. But due to speculations surrounding it the predicted rate is tends to be from 30$ — 50$.
So if you are interested in selling your pi network coins at a high rate tho. Or you can't wait till the mainnet launch in 2026. You can easily trade your pi coins with a merchant.
A merchant is someone who buys pi coins from miners and resell them to Investors looking forward to hold massive quantities till mainnet launch.
I will leave the what's app number of my personal pi vendor to trade with.
+12349014282
Health promotion levy tax on sugary beverages - South Africa- FTI Consulting
1. CUSTOMS & EXCISE
HEALTH PROMOTION LEVY – Tax on Sugary Beverages:
Focus on accounting and monitoring
On 1 April 2018 South Africa introduced the Health Promotion Levy (“HPL”)
which directly impacts manufacturers of sugary beverages, from both a tax
administration and an accounting perspective. Recent experience has shown
that manufacturers impacted by HPL exclusively focused on the immediate
registration requirements communicated by the South African Revenue Service
(“SARS”) without considering the subsequent impact that HPL related activities
will have on their underlying accounting entries.
So what’s new?
The HPL came into effect on 1 April 2018. It introduced a
tax in the form of a levy on specific beverages that have
added sugar or added nutritive sweeteners as part of the
manufacturing process. The main purpose of the levy is to
attempt to both reduce the consumption of sugary drinks
for health purposes as well as to force manufacturers to
amend the product composition by replacing sugar and
nutritive sweeteners with non-caloric substitutes.
Based on communications issued by National Treasury,
the immediate objective of the HPL is to reduce obesity by
10% in South Africa by 2020. Although the motivation for
the HPL appears to be aimed at increased health
awareness, the fiscal function of the levy should not be
underestimated and it is expected to increasingly
contribute to limit tax deficits.
“The complexities inherent to the duty
at source (“DAS”) taxation system (only
for in-scope products) combined with
prescribed recovery mechanisms
(delayed by nature), requires a robust
accounting framework & accounting
system. Whilst the accounting
mechanisms need to ensure
compliance to the SARS submissions,
(prevailing penalties and interest for
non-compliance are currently in excess
of 300%, including stock forfeiture;
closure of manufacturing warehouses
and the revoking of the HPL
registrations) it also needs to ensure
effective recovery of the Levy assets.”
2. Determination of the most effective
trigger point in the supply chain at
which the product is deemed as being
‘removed for local consumption’ is
critical.
The legislation contains an offsetting
principle where the levy on exported
product can be offset from the
monthly payment to SARS. Failing to
take advantage of this principle will
have a significant negative impact on
working capital employed and an
increased administrative burden.
Similar HPL’s have been successfully introduced in
other countries such as Mexico and various federal
states in the United States of America, with the United
Kingdom following suit in 2018.
The HPL legislation was included in Schedule 1 Part 7
of the Customs and Excise Act 91 of 1964 (“the Act”)
and the principles governing the HPL are provided for
in the Act and the Rules thereto.
HPL is collected under a duty at source (“DAS”) regime
and is therefore a manufacturing tax, as opposed to a
transactional tax (e.g. Value Added Tax). In brief, DAS
entails that the HPL is collected at “point of source”
and not “point of sale”, thus within the manufacturing
environment.
The liability for HPL generally arises at the point where
the product is manufactured and attains the essential
characteristics of the listed HPL products i.e. the
“essential character” of e.g. a sugary beverage, such as
a soft drink. At this point, SARS will generally have an
interest in the product.
The HPL legislation specifically excludes alcoholic
beverages, 100% fruit juices and unsweetened
beverages with a dairy base, but it includes sweetened
waters, syrups (to be diluted prior to consumption),
powder-based drinks (including those with a cocoa
basis and to be mixed with a fluid before consumption)
and sweetened fruit juices. Concentrates and products
that require dilution or powder to be mixed with a
fluid will result in the HPL being calculated on the
sugar content of the final product i.e. post dilution
ratio in line with the prescribed dilution criteria.
It is important to note that the sugars subject to the
levy include both added and intrinsic sugars; a
sweetened fruit juice will therefore not only be levied
on the added sugar but also on the sugar contained
naturally within the fruit juice base.
Given the complexity of the composition of most
products subject to HPL, it is essential to obtain
customs tariff determinations from SARS on those
products where a level of uncertainty governs the
decision to include or exclude such products from HPL
items provided for in the Act. Examples of the latter
includes various sweetened dairy products such as
drinking snacks, milk based fruit drinks, energy drinks,
carbonated fruit juices (100% or mixed) and HPL
products with a sugar content of less than 4g/100ml .
Impact on operations
Any person/organisation who manufactures sugary
beverages is obliged to determine if it is regarded as a
non-commercial or a commercial manufacturer, with
reference to their annual consumption of sugar added
to HPL products during the manufacturing process.
Commercial manufacturers (i.e. manufactures of
sugary beverages with a sugar consumption exceeding
500 kilogram per calendar year) must license their
manufacturing premises with SARS as a customs and
excise manufacturing warehouse (“VM”) which will be
subject to the provisions of the Act and permissible
business processes as legislatively prescribed.
The levy is currently recovered at 2.1 cents per gram
of sugar per 100 ml of the sugary beverage. The first 4
grams of sugar per 100 ml is levy free.
For calculation purposes, the HPL legislation requires
that the sugar content of each product be confirmed
by a SANAS / ILAC certified laboratory. However,
subject to the scope and nature of the products
manufactured, these laboratory results could
substantially differ on the same product, resulting in
the need for the recording thereof within a clearly
defined governance protocol to ensure reputational
risks are limited should non-compliance to the Act be
alleged in future SARS audits. To address the latter, it
is advised that an application for the tariff
determinations of HPL products includes the relevant
laboratory results to ensure that SARS agree to the
correctness thereof.
3. Levy Payments Levy Recovery
A monthly submission per DA179 account must be
submitted to SARS, detailing the sugar volume per HPL
tariff heading of leviable product. The relevant
documents and levy payments must be submitted to
SARS via e-filing.
The levy is paid in the following instances:
Local production (as set out above);
Local purchases: The levy is passed through
the supply chain, via a commercial local sales
invoice, from a commercial manufacturer to
the next participant in the value chain; and
Imported product: The levy is brought to
account at the point of import into South
Africa.
The levy can be recovered by:
Local sales to customers: The Act, in
conjunction with the SARS communication in
relation to the HPL, requires the levy amount
to be indicated separately on the commercial
sales invoice.
Export sales: Where product is exported to
any location outside of the South African
borders, the levy can be recovered from SARS,
either via a direct offset on the VM account
(DA179) if exported directly out of the VM or
via a laborious manual administrative process
(DA66 submission) for levy paid exports.
Off specification: Rebate from SARS should
the product not be fit for local consumption
due to contamination, deterioration or off-
specification.
Vis major losses: Rebate from SARS should
the product be lost due to a vis-major event.
Accounting approach
Consideration should be given to the most
appropriate accounting treatment of the levy. A
comparison of applied accounting for this type of DAS
taxation would highlight the following two
approaches:
Income statement approach: Capitalisation to
inventory where eventually the levy will end
up in ‘sales’ and ‘cost of sales’; and
Balance sheet approach: Capitalisation to levy
control account, where the levy will be
managed in the balance sheet and only
released to the income statement in the
event of non-recovery (e.g. products
distributed for marketing purposes).
Careful consideration (and agreement with external
auditors / outside stakeholders) should be applied to
the selected method, as variances in the application of
the accounting standards are evident between the
different industries where DAS is applied.
Monitoring the levy asset
Irrespective of the preferred accounting treatment,
the manufacturer will, in each case, pay over an
amount of levy to SARS on a monthly basis and
therefore needs to recognise a corresponding asset on
the balance sheet. The levy asset can be recovered
from either local customers (by inclusion in the
commercial sales invoice, as required by law) or from
SARS (for exports from the VM by offsetting on the
DA179 form, or for levy paid exports via a manual
DA66 procedure).
Complexities in monitoring and effectively recovering
the levy asset arise due to the difference in timing and
volume between manufacturing (date of creating the
asset) and the recovery of the levy.
The manufacturer should take cognisance of the
following important HPL specific intricacies:
The balance sheet levy asset should at all
times be reconcilable to HPL stock on hand
multiplied by the appropriate rate (this
reconciliation will be required to prove
4. existence, valuation and accuracy for external
audit purposes);
Transitioning to a HPL tax environment, where
complexities arises due to pre-HPL production
incorrectly recovered via commercial sales
invoices, or post-HPL production not
recovered via commercial sales invoices;
Complexities introduced through continuous
efforts to reformulate in scope products to
reduce sugar content, ensuring that sugar
content at time of payment to SARS aligns to
recoveries included on invoices;
Date stamping of production will be of
paramount importance at the time of levy rate
changes. Levy paid stock, accounted for at old
levy rates, exported subsequent to a levy rate
increase must be acquitted at the old rate.
The manufacturer’s commercial sales invoice
will be utilised for third party export acquittals
from SARS, if variances occur between the levy
paid to SARS (via DA179 submission) and the
recovery information on the commercial
invoice SARS will be out of pocket;
Margin erosion will occur where payments
made to SARS and recoveries differ. E.g. HPL is
paid over on a certain stock keeping unit
(SKU), but not charged to a particular
customer, due to the HPL exclusive pricing
being applied to a local customer.
Future direction and anomalies
A comparison of the DAS principles applied to various
industries highlights significant anomalies. Some of
these anomalies as they pertain to HPL have an
adverse impact on South African Fast Moving
Consumer Goods (“FMCG”) supply chains and one
would expect future changes to the principles to
accommodate more efficient supply chains and
customs and excise processes:
In the Petroleum, Alcohol and Tobacco
industries, provision is made for the bonded
movement of manufactured product between
the primary production environment (VM or
VMP) and other primary or secondary
production sites (VM or VMS sites) under the
suspension of duty. As such, movements are
allowed as a bonded movement where the
levy is suspended. This levy suspension is
currently not afforded to HPL registrants, with
the adverse impact of most FMCG companies
not being able to extend the VM registrations
to include a finished product store as current
supply chains are designed to incorporate
significant movements between VMs. A
further unintended consequence of the failure
of SARS to allow for bonded movements from
VM sites is that any subsequent movement
between VMs results in double HPL taxation.
The concept of an Export Special Storage
Warehouse (SOS) is a well-defined concept in
customs and excise legislation and provided
for in other excise industries. Movements
between the VM and the export SOS are duty
and levy suspended, that results in the
transfer of excise duty or levy liability from
one registrant to another registrant within a
SARS regulated movement regime. Despite
these movements being available for excise
industries such petroleum, alcoholic
beverages and tobacco products, the concept
of a SOS warehouse has not been
incorporated into the HPL legislation, with a
further adverse impact on FMCG companies,
forcing the companies to bring the levy to
account on all non-VM exports and recovering
it via a cumbersome DA66 process.
Combining the aforementioned omission of
the VM to VM suspension with the omission of
Export SOS suspension leads to most FMCG
companies limiting the VM registration to only
the production facility with no capacity to
store finished stock inside the VM (to
eliminate the double tax when moving stock
between VMs). This form of VM design
eliminates the use of the DA179 offsetting
principle for exports. This is further
exacerbated by the inability to move exports
to a SOS, resulting in all levies paid on exports
being recovered through the DA66 process
5. (which limits recoveries to 5 documents per
return). The impact is a significant increase in
administrative burden both on SARS and HPL
registrants.
Current HPL legislation does not provide for
“allowable losses” similar to other industries
governed by the DAS regime. The HPL
legislation rebates will only be allowed for
returns to the VM (of origination) due to:
Contamination, deterioration and off-spec
product. Due to current FMCG supply chain
processes, it is common cause that most
companies are unable to link the HPL return to
the VM of origination and even if possible to
do so, it is not commercially feasible to return
product to the VM of origination.
How can FTI help?
FTI provides the most comprehensive HPL service
offering in South Africa that includes both a legal and
accounting advisory solution.
The legal advisory solution includes policy guidance,
SARS liaison on all customs tariff and levy related
queries, submissions, training and dispute advisory
services.
The accounting advisory offering revolves around a
bespoke industry leading solution that comprises an
excise and levy specific FTI proprietary developed
software database containing all possible inventory
movements provided for under the HPL legislation.
The database allows us to import and analyse
the client’s actual historical supply chain
movements, providing real data to support
decision making for the most efficient VM
registration applicable to the client’s supply
chain (business case based on actual impact of
registration to the income statement and
working capital requirements);
Based on knowledge of administering DAS in
various industries we developed a leading two
tiered accounting reconciliation methodology
with the following attributes:
o Monthly reconciliation of the HPL
balance sheet asset to the total
inventory asset (as required for
external audit purposes)
o Detailed monthly matching of every
inventory movement and the
corresponding HPL impact to all levy
payments (local purchases, DA179
SARS payments, Imports) and all levy
recoveries (local commercial sales
invoices, export acquittals via DA179
offsets and DA66 refunds).
The reconciliation methodology allows us to
assist clients by designing the most
appropriate chart of accounts; or provide an
outsourced managed services solution where
we supply accounting journals; provide
DA179/66 information; perform monthly levy
reporting packs (including linking levy to
closing inventory and detailed matching).
Once FTI is satisfied that the levy legislation,
together with the client’s supply chain has
stabilised (indicated by limited number of
monthly unreconciled entries), a Business
Requirement Specification (BRS) is produced
guiding the client to code their in-house ERP
system to effectively manage the HPL
processes.
6. Christo Roux
Senior Managing Director,
Business Transformation,
South Africa
+27 (0) 82 719 0817
christo.roux@fticonsulting.com
Heine Streicher
Managing Director,
Business Transformation,
South Africa
+27 (0) 83 269 7449
heine.streicher@fticonsulting.com
Willemien Saunders
Director,
Business Transformation,
South Africa
+27 (0) 66 478 0770
wilhelmina.saunders@fticonsulting.com
Jotham Barry
Consultant,
Business Transformation,
South Africa
+27 (0) 66 478 0753
jotham.barry@fticonsulting.com