The National Treasury has published for consultation the ‘Basic Approach for Export Taxes on Scrap Metal’, following the announcement made by Finance Minister Tito Mboweni in the 2020 Budget Review regarding the introduction of such a tax.
The proposal is related to the phasing out of the current price preference system of scrap steel and follows he recommendations from a feasibility study conducted by the International Trade Administration Commission of South Africa (Itac).
Given the need to consult all stakeholders, including possible winners and losers, the consultation will take place in two phases.
The first will be a shorter and broader public comment process on the objectives, implementation, functioning and economic and financial impact of such an export tax, including the level of rates and base for such a tax.
The second will be a more intensive public comment phase on the proposed legislative provisions to give effect to specific export taxes on scrap metal to be included in the 2020 draft Taxation Laws Amendment Bill (TLAB).
The first phase will begin immediately and run to the end of April, while the second will start with the publication of TLAB and run to the end of August/September.
To facilitate the first phase, the National Treasury will hold an initial briefing on March 25 with all interested stakeholders on the proposal.
Written comments on the proposal must be submitted by no later than April 9.
Following receipt of comments, the National Treasury will engage directly with stakeholders until the end of April through technical workshops.
Thereafter, the proposed provisions will be developed for inclusion in the TLAB, which will be published in mid-July for public comment.