The main challenge in international trade is the interchangeable and indiscriminate use of terminology. Take the instance of excise duty – or is it excise tax or excise levy? If you are of the persuasion that it is a case of potayto, potahto; or tomato, tomahto, then you would be mistaken. It originates from the lyrics of the song Let’s Call the Whole Thing Off: “You like potayto, I like potahto; you like tomayto, I like tomahto; potayto, potahto, tomayto, tomahto – let’s call the whole thing off!”

Unlike the song’s lyrics, terminology matters, as do details.

What complicates matters is the origin of the naming terminology. Take the instance of excise duty, which originates from the Latin accensare, which means “to tax”. It was first imposed by Caesar Augustus, the first Roman emperor, who reigned from 27 BC to AD 14, before it was abolished by Caesar Caligula in AD 38. It was only in the mid- seventeenth century that excise duty returned through the Dutch calling the imposed duty accijns.

On March 25, the South African Revenue Service (Sars) published its ‘Excise Essential Guide for Small Businesses’, which opens with the question: “What is excise tax?” It then offers this answer: “Excise tax is indirect duties, levies and taxes imposed on certain locally manufactured and imported goods which are consumed in South Africa. Excise legislation makes provision for certain goods to be taxed at the closest point to where they are manufactured. “The revenue-raising objective of excise tax is to finance government’s expenditure for education, housing, health, etc, through the annual Budget. Another objective is to utilise the tax as an instrument to discourage the consumption of certain products that are potentially harmful to citizens’ health and the environment.”.

Here is the thing – the ‘Schedule to the Customs and Excise Act, 1964’ does not reference excise tax, but rather excise duty. Part 2A of Schedule 1 to the Act, 1964, is titled ‘Specific Excise Duties on Locally Manufactured or on Imported Goods of the Same Class or Kind’, while Part 2B is titled ‘Ad Valorem Excise Duties on Locally Manufactured Goods or on Imported Goods of the Same Class or Kind’ and Schedule 6 ‘Refunds and Rebates of Excise Duties, Fuel Levy and Environmental Levy’.

When referring to Part 2A (specific excise duties) these are categorised as ‘sin taxes’ in the annual National Budget, and in Part 2B (ad valorem excise duties), these are ‘luxury taxes’’, or ‘nonessential taxes’. Collectively, these ‘taxes’ are called indirect taxes, because the ‘tax’ is ultimately paid by the consumer, and not by the importer or manufacturer.

Excise duties differ from customs duties in that excise duties are imposed on manufactured goods, while customs duties are imposed on imported goods. In the Southern African Customs Union (Sacu), each of the member countries – Botswana, Lesotho, eSwatini, Namibia and South Africa – imposes a singular rate of customs and excise duty. Normally, in trade blocs, member countries impose their own rate of excise duty. Customs duty is an international duty, whereas excise duty is a national duty.

To complicate matters, Sars’ guide mentions in passing that “excise levies are unique to each member State of the Sacu countries”. The excise levies imposed by South Africa are: a fuel levy on petroleum products; the Road Accident Fund levy on petroleum products; the environmental levy; the plastic carrier and flat bag levy; the generation of electricity levy; the electric filament lamp levy; the carbon dioxide (CO2) emissions levy; the tyres levy; the CO2 greenhouse-gas emissions levy; the lealth promotion levy (sugary beverages); the diamond export levy; the air passenger tax; and the international oil pollution compensation fund levy.

It would be helpful if a singular terminology was used. It should either be excise duty or excise tax.