Do you import goods into the Southern African Customs Union (Sacu)? Do you manufacture goods in the Sacu region? Additionally, do you import components into this region which you use in the manufacture of goods? Finally, do you pay customs duties on the importation of the components that you use in the manufacture of goods, which you either sell in the Sacu region or export?

Why all these questions? That’s a fair question. However, there is still another important question – not whether you have investigated whether you are able to apply for a reduction in customs duties, although this is worth asking. Rather, the question to be asked is: If you have a customs duty liability, why would you hire a consultant to assist with a tariff application on your behalf? Why not handle it yourself?

If you would like to explore the second question, I must admit that, despite my years of specialisation, beginning with the then Board of Tariffs and Trade, I still cannot fathom why businesses hire consultants to complete tariff applications on their behalf.

You might wonder why. Well, there are many ‘whys’, and the most obvious question would be what value a consultant provides. There has to be a value, as consultants’ services come with a financial cost. But that’s not the only expense – you will invest your time, as the consultant will need to learn all about your business. Additionally, you will need to supply the consultant with the supporting documentation and review the application before it is submitted.

Is it fair to say that by hiring a consultant you expect to gain a competitive advantage, since consultants possess, in a word, experience, which implies they have attained knowledge through direct observation or participation?

This raises the question: Why would you need experience? And if it is needed, how intensive should that experience be? But do you actually need experience to conduct a tariff application?

There are three types of tariff applications administered by the two tariff investigations units of the International Trade Administration Commission of South Africa (Itac). These are applications related to an increase in ordinary customs duties, a reduction in ordinary customs duties and the creation of rebate and drawback provisions.

To submit a tariff application, you simply need to read Itac’s ‘Tariff Investigations’ brochure, ‘Tariff Investigations Regulations’, ‘Tariff Investigations Regulations Amended’ and ‘Tariff Investigations Application Forms’.

When it assesses your tariff application, Itac considers the following main criteria, while also evaluating the application on its own merits and specific circumstances: the Sacu industry’s production capacity and potential; employment; investment; the price differential between the Sacu-manufactured product and the imported product; the market shares of the Sacu-manufactured and imported products; import and export data, which you could obtain free of charge from the South African Revenue Service (Sars); demand and supply conditions; the financial state of the Sacu industry, including profitability and return-on-investment ratios; price and cost structures; and the rate of effective protection, which you can calculate.

If you have all the aforementioned information, you simply need to collate the information into a confidential application as well as a nonconfidential one. In addition, you need to sign an affidavit, which a consultant cannot do on your behalf.

For its part, Itac will verify whether you have a tax clearance certificate from Sars; if you do not have one, then you should not consider submitting a tariff application in the first instance.

If, after you have reviewed the documents, you still require assistance, you should contact Itac and request to speak to an official. You could also review Itac’s ‘Investigation Reports’.

With all the support that is available to you, and considering that you know your business better than anyone else, why would you consider engaging a consult to do the work for you? You are empowered to do you own homework. Why not deal with Itac directly, which might well be what Itac prefers?

The documents referenced are accessible at:

www.itac.org.za/upload/Tariff_Investigations.pdf;

www.itac.org.za/pages/services/tariff-investigations/regulations

www.itac.org.za/pages/services/tariff-investigations/application-forms

www.itac.org.za/pages/services/trade-remedies/investigation-reports