Times Of Swaziland: DELAYS IN SACU REVENUE SHARING FORMULA REVIEW

DELAYS IN SACU REVENUE SHARING FORMULA REVIEW
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  BY ASHMOND NZIMA  on 26/08/2020 05:49:00


MBABANE - The Southern African Customs Union (SACU) Council of Ministers’
failure to regularly meet to approve essential documents is said to be derailing
many policies and programmes.
SACU brings together Botswana, Eswatini, Lesotho, Namibia and South Africa and
its mandate includes ensuring smooth movement of goods and services through a
common external and excise tariff.
SACU Executive Secretary Paulina Elago was quoted saying that delays in
approvals of recommendations meant delays in implementation of resolutions and
stifling of operations in general.
Adopted
The executive secretary said the electronically transmitted round-robin approval
process adopted because officials cannot physically meet due to the COVID-19
pandemic was proving to be inefficient.
The delays in approving reports in said to have resulted in delays in
implementing SACU’s most vital project, the work programme.
SACU’s work programme is to focus on key areas that include the review and
development of a suitable architecture for tariff settings and constant revision
of the revenue sharing formula to ensure no member State is short-changed.
All customs and excise collected in the common customs area are paid into South
Africa’s National Revenue Fund and subsequently shared among members according
to a revenue-sharing formula. South Africa is the custodian of this pool.
According to the SACU Agreement of 2002, the revenue-sharing formula uses three
components to calculate revenue shares for member States. These are a customs
component, an excise component and a development component.
Share
Using the customs component, revenue is allocated on the basis of the share of
each country in intra-SACU imports, while the excise element allocates the funds
on the basis of each country’s share of Gross Domestic Product (GDP).
Revenue allocations using the development component are fixed at 15 per cent of
total excise revenue and distributed according to the inverse of per capita GDP
of each country.
Under the present arrangement, South Africa is the custodian of CRP and all
customs and excise duties collected in the common customs area are paid into the
South African National Revenue Fund. The revenue is then shared among SACU
member States according to the revenue-sharing formula as described in the
agreement.
Calculated
Only the shares for the BLNS (Botswana, Lesotho, Namibia, and Eswatini)
countries are calculated, with South Africa receiving the remainder.
The BLNS countries have complained over the years that the revenue sharing
formula does not fully compensate them and that there is a lack of consultation
by South Africa of its SACU partners.
Another complaint is that the countries allege that there are various non-tariff
barriers preventing their access into the South African market.