23 February, 2017
Invitation to meeting to discuss proposed amendments to diesel rebate regulations
Please see below for your information a media release issued jointly
by the Treasury and SARS regarding proposed amendments to
the diesel rebate regulations together with a Discussion
Document for public comments thereon. Such comments have to
be lodged by 15th May 2017. FSA will be making
Some of the
key points related to forestry operations are as follows:
Qualifying primary production activities
rather than users
- An indicative list of
the type and nature of qualifying activities and use by
primary producers is provided in the discussion paper and
this will be finalised through the public comment
- The list still
excludes the transportation of bark as it is not regarded as
a "forest product".
Inclusion of contractors
- The inclusion of
contractors is proposed to allow small-scale growers and new
and new entrants who lack the necessary funding or
experience to benefit from the rebate system.
Linking qualifying activities to physical
- The need to link the
qualifying activities to a physical location has also been
identified, which will enable easier definition of primary
activities and monitoring of diesel use to prevent double
claims and help curb the abuse of the system which,
unfortunately, is a regular occurrence.
- The proposed
exclusion of all off-site transport and any
processing activities, as well as stricter registration and
enforcement measures, would also significantly curb the
potential for abuse. The current 80:20 percentage allocation
to determine qualifying refunds in farming, forestry and
mining on land will therefore fall away.
Administrative enforcement and taxpayer
- These will be based on
risk profiling of diesel refund beneficiaries,
while enforcement will continue to rely on taxpayer
compliance with logbook obligations.
- Beneficiaries will be
expected to update and maintain their diesel
refund registration profiles electronically
to validate their claims. Claims outside the scope of the
beneficiary's registration profile will be denied.
- Diesel refunds will
only be allowed in respect of diesel dispensed from
storage facilities formally on record with SARS
to diesel-powered equipment and vehicles also formally
on record with SARS. In addition to logbooks (a
standard format per sector is proposed), claimants will be obliged
to maintain proper service and repair records
for such machinery and vehicles to prevent ghost claims.
Standalone Diesel Refund Administration
- A standalone diesel
refund administration is proposed separate from the VAT
system - implementation planned in 2018.
- The new system will be
phased in through the initial confirmation of current diesel
refund registrants followed by the re-registration of
all beneficiaries anew over time.
Although some of the proposals are to be
welcomed, there are still many concerns that we have
previously raised with SARS but which have not been
addressed. It is thus my intention to hold a meeting of
all those interesting in giving their input during March
in order to assist us in drafting our submission. I shall
send out alternate dates once I have received a list of
those wishing to attend the meeting.
Should you wish to attend this proposed
meeting, please inform Judy Dowsett, our PMB Office Manager