Consultations on scrap metal export taxes set to begin

Wednesday, March 11, 2020

National Treasury has invited the public to comment on the proposal of export taxes on scrap metal.

Treasury has published the basic approach for consultation after Finance Minister Tito Mboweni announced in the 2020 Budget Review the introduction of export taxes on scrap metal.

This proposal is related to the phasing out of the current price preference system for scrap steel, and follows the recommendations from a feasibility study conducted by the International Trade Administration Commission (ITAC).

“Given the need to consult all stakeholders, including possible winners and losers, the consultation will take place in two phases,” said Treasury in a statement.

The first phase will be a shorter and broader public comment process on the objective, implementation, functioning, and economic and financial impact of such an export tax, including the level of rates and base for such a tax.

Comments on the impact to current firms and industries, and the implications for the tax and trade system will also be welcome, as well as comments on strengthening the administrative capacity of the South African Revenue Service (SARS) to implement such export taxes.

This will be followed by a more intensive second phase of public comment on the proposed legislative provisions to give effect to specific export taxes on scrap metal. These are to be included in the 2020 draft Taxation Laws Amendment Bill (TLAB).

“The first phase will commence immediately and run up to the end of April 2020, while the second phase will commence with the publication of the Taxation Laws Amendment Bill in mid-July, and run up to the end of August/September 2020.

“Written comments on the proposal on export taxes on scrap metal must be submitted by no later than 9 April 2020,” Treasury said.

Upon receipt of the comments and submissions on the proposal on export taxes on scrap metal, Treasury (working with the Department of Trade, Industry and Competition and other governmental stakeholders) will engage directly with stakeholders until the end of April through technical workshops to discuss the comments received. Thereafter, the proposed provisions on the export taxes on scrap metal will be developed for inclusion in the TLAB, which will be published in mid-July 2020 for public comment.

Further, as part of the TLAB consultation process, National Treasury will also engage with stakeholders through the usual workshops held after the receipt of written comments on the draft Bill. The Standing and Select Committees on Finance in Parliament are expected to make a similar call for public comment, and convene public hearings on the TLAB before the formal introduction of the bill in Parliament.

Thereafter, a response document on the comments received will be presented at the parliamentary committee hearings, after which the 2020 draft Taxation Laws Amendment Bill will then be revised, taking into account public comments and recommendations made during committee hearings before the Bill is tabled formally in Parliament for consideration.

The proposal on export taxes on scrap metal is included in Chapter 4 of the 2020 Budget Review, which can be found on the National Treasury website –