This article highlights the introduction of the Advance Import Payment (AIP) Notification by the South African Revenue Service (SARS) as part of its Customs Modernisation Programmes. In collaboration with the South African Reserve Bank (SARB) and authorised dealers in foreign exchange.
In an effort to modernise customs processes and combat illicit financial activities, the South African Revenue Service (SARS) has introduced the Advance Import Payment (AIP) Notification as part of its Customs Modernisation Programmes.
The AIP Notification: Addressing Financial Fraud
The AIP Notification is a crucial component of the broader Advance Payment Notification (APN) project. Through this system, traders are required to notify SARS of their intention to apply for an advance foreign exchange payment from an authorised dealer for imported goods. By doing so, the APN process helps prevent underpayment of customs duties and taxes, as well as valuation fraud and illicit financial flows associated with advance foreign exchange payments.
Impact on Customs Compliance and Tax Obligations in South Africa
The implementation of the AIP Notification system not only strengthens customs compliance but also simplifies the tax obligations of taxpayers and traders. By making non-compliance more challenging and costly, SARS aims to promote transparency, fairness, and integrity in import-export transactions, ultimately contributing to a more secure and efficient trading environment in South Africa.
Mandated Reporting: Effective 1 December 2023
Effective from 1 December 2023, authorised dealers are mandated to record, validate, and report the APN provided by traders to the SARB upon the conclusion of such payments. This means that advance import payments will only be processed by authorised dealers upon confirmation of a valid SARS APN.
Benefits of implementing the Advance Import Payment (AIP):
By leveraging technology and collaboration with key stakeholders, The AIP Notification initiative aims to:
- Strengthen customs compliance in South Africa.
- Simplify tax obligations for taxpayers and traders.
- Address issues related to customs valuation fraud and the misuse of advance foreign exchange payments for imported goods.
- Combat illicit financial activities in South Africa.
- Promote transparency, fairness, and integrity in import-export transactions.
- Contribute towards a secure and efficient trading environment in South Africa.
- Prevent underpayment of customs duties and taxes
InterGest South Africa is dedicated to helping businesses navigate the complexities of the local business environment and staying up to date with the most recent developments in South Africa. If you have any questions or require assistance, please feel free to reach out to our Tax Manager.
Muhammad Soni,
Head of Tax
Email address: muhammad.soni@intergest.com
