We, at SARS, recently invited economists, journalists and other stakeholders to a session where we told them that the legacy we have inherited does not allow us to handle trade statistics in an ideal manner.
We were open about our problems. We also told them about a restructuring process we have initiated to resolve those problems. Through this process we are reviewing customs and tax components of our organisation.
This restructuring process will impact fundamentally on the IT infrastructure, operational policies and organisational processes.
The new SARS, I cannot overemphasise this, is committed to conducting its business in an efficient and effective manner. It is because of this that we publicly admitted the shortcomings in our systems. We have been commended for this approach.
The meeting that we had last week with our stakeholders was convened to discuss measures with which to improve the reliability and credibility of the trade statistics.
Suggestions made at this meeting as well as SARS' initiatives will definitely result in future improvements.
In the near future, a detailed monthly abstract of trade statistics will be published in zip format on the Customs website, so that three months after the end of the month detailed trade data will be available.
South Africa's role in the global trading arena is growing steadily and it is absolutely necessary that credibility in the import and export processes as well as reporting standards are maintained and continuously enhanced.
Why is SARS so serious about revamping the trade statistics? South Africa subscribes to the Special Data Dissemination Standard (SDDS) of the International Monetary Fund. Now, countries that subscribe to the SDDS commit to certain standard as well as to providing information about their data and data dissemination practices. The majority of the developed countries and a number of developing countries, South Africa included, meet the SDDS specifications for coverage, periodicity and timeliness of the data and for dissemination of advance release calendars.
Measures taken to improve the data are dealt with in two ways:
Improved trade control: A number of factors impact on the reliability of trade data and compliance is one of the most important. A number of initiatives aimed at improving compliance are currently being piloted and once fully tested will be rolled out to the relevant offices. Examples of these initiatives are:
Improved reporting: the elements of this are:
Trade data has historically been released on a cumulative year-to-date basis, mainly due to the Customs Act allowing importers and exporters up to 24 months to submit corrections to their original import or export declarations. To arrive at a reporting month's trade figure, the previous month's cumulative total had to be subtracted from the reporting month's cumulative total.
The new format of reporting will now give a monthly import and export total, the trade balances, the change in monthly import and export, and a brief description of the main imports and exports categories, which resulted in changes to the trade balance. The new format will obviate the need for analysts to indulge in time-consuming calculations in order to draw conclusions.
Controls have been put in place to ensure that "carry-overs" from one month to another are eliminated to the greatest extent possible. In the event of there being a "carry-over" due to late reporting, the inclusion of such amounts will be explained in a note. The true monthly trade figure (monthly figure minus carry-over amount) will also be reflected.
Adjustments result from corrections made by exporters / importers to declarations.
These corrections result in import and export figures being adjusted upwards or downwards.
The adjustments will be shown on a cumulative basis and will assist users in understanding changes in previously reported cumulative figures.
ISSUED BY THE COMMISSIONER FOR THE SOUTH AFRICAN REVENUE SERVICE