CUSTOMS EXTERNAL POLICY PAYMENTS

CUSTOMS EXTERNAL POLICY PAYMENTS Revision: 3 Page 1 of 11

TABLE OF CONTENTS 1 SCOPE 3 2 POLICY 3 2.1 Date of payment 3 2.2 Proof of payment 3 2.3 Acceptable payment methods 3 2.3.1 Electronic payments via internet 3 2.4 Offices with the new Account Management System 4 2.5 Customs office where the new Account Management System is not implemented 4 2.5.1 Payment via e-filing 5 2.5.2 Cash 5 2.5.3 Cheque 6 2.5.4 Travellers cheques 7 2.5.5 Postal orders 7 2.5.6 Attorney trust and estate cheques 7 2.5.7 Bank cheques 7 2.5.8 Credit / debit cards 7 2.5.9 Over the counter payment 8 2.5.10 Foreign payments 8 2.6 Deficit (shortages) 9 2.7 Cheque losses 9 2.8 Source documents 9 2.9 Keeping records 9 2.10 Penalties 9 2.11 Appeals against Decisions 10 3 REFERENCES 10 3.1 Legislation 10 3.2 Cross References 10 4 DEFINITIONS AND ACRONYMS 10 5 DOCUMENT MANAGEMENT 11 Revision: 3 Page 2 of 11

1 SCOPE a) The purpose of this policy is to regulate payments and source documents from Customs clients to ensure timely and accurate capturing. b) It includes the processing of Electronic Fund Transfers (EFT), direct deposits, cash payments and credit or debit card payments. c) Credit and/or debit cards must only be used for payment of duties and/or VAT for travellers. 2 POLICY 2.1 Date of payment a) All specified payment dates must strictly be adhered to. b) Should a payment date fall on a Saturday, Sunday or public holiday, said payment must be furnished on the last business day prior to the days mentioned above. 2.2 Proof of payment a) Clients must provide proof of payment to the relevant SARS Customs Office on time if any payments were made via internet banking or over the counter at the bank. b) The client must present the proof of payment in the following format; i) A bank deposit slip. ii) An internet banking confirmation printout. iii) efiling acknowledgement. c) The client must ensure that he/she always retain the original or copy of proof of payment. d) Requirements at Customs Offices where the new Account Management System is implemented will be as follows: i) Proof of payment is NOT required where the unique Payment Reference Number (PRN) per cash declaration/statement was used in making payment to SARS. The payment referenced with the unique PRN will automatically be allocated to the declaration it relates to; ii) However, where the unique PRN provided by SARS for a cash declaration/statement was NOT used correctly and the automated allocation of payment was therefore not performed, proof of payment may still be required in order for SARS to investigate the matter; iii) Proof of payment is required in the instance where the payment was made towards a SARS initiated transaction i.e. provisional payment; and iv) Each office where the new Account Management System is implemented will be announced and stakeholders informed. 2.3 Acceptable payment methods 2.3.1 Electronic payments via internet a) Electronic payment is the preferred method of payment but clients may use any of the methods mentioned below. b) Payments can be made directly to SARS utilising the internet banking facilities of ABSA, FNB, Nedbank, Standard Bank, CitiBank and Investec. c) In all instances it is imperative that the correct payment reference information is provided to ensure that revenue payments can be identified and correctly allocated upon receipt by SARS. Revision: 3 Page 3 of 11

EFFECTIVE DATE d) Customs payments done at any First National Bank (FNB) Branch are also regarded as an internet payment. e) Clients must ensure that the payment will reach SARS by the due date regarding the relative payment. Clients must enquire from their bank whether same day transfers will be made to the relative bank account. If not, the transfer must be made in advance. Electronic transfers received in the SARS bank account after due date could incur penalties and interest as a result of a late payment. 2.4 Offices with the new Account Management System a) The new Account Management System will be implemented in an office by office approach, and the following payment reference number usage is essential in order to allow automated allocation of payments: i) SARS will provide a unique PRN per declaration/statement to allow automated allocation; ii) The unique PRN is provided on the CUSRES for a non-deferment declaration and also on the monthly statement of account; iii) The unique PRN has to be correctly quoted when making payment via any official payment channel; iv) The unique PRN is a unique 19-digit reference number; and v) Each office where the new Account Management System is implemented will be announced and stakeholders informed. 2.5 Customs office where the new Account Management System is not implemented a) The following two (2) items are essential in order to ensure that payments are processed correctly relevant for all Customs offices where the new Account Management System has not been implemented: i) SARS Beneficiary Account ID. The beneficiary ID for Customs is SARS-CUS. ii) A 19-digit bank payment reference number. This informs SARS exactly who the client is and enables the allocation of such payment to a specific duty type and date. b) The payment reference number is made up as follows; 2 digits 8 digits 1 digit 8 digits Numeric Branch / Customs code number Tax Type Payment date District Office Code c) The first two (2) digits relate to the office where payment will be effected: District office name Numeric code Beit Bridge 15 Bloemfontein 60 Caledonspoort 62 Cape Town 30 Cape Town International Airport 31 Durban 50 Durban International Airport 51 East London 33 Ficksburg Bridge 63 Germiston 13 Golela 97 Grobler s Bridge 54 Jeppe s Reef 93 Johannesburg 10 OR Tambo International Airport 11 Kimberley 35 Kopfontein 55 Revision: 3 Page 4 of 11

District office name Numeric code Lebombo 14 Mahamba 96 Mananga 98 Maseru Bridge 64 Mmabatho 36 Mossel Bay 34 Nakop 28 Nerston 95 Oshoek 94 Oudtshoorn 20 Paarl 21 Pietermaritzburg 52 Port Elizabeth 32 Port Elizabeth Airport 37 Pretoria 12 Qacha s Neck 67 Ramatlabama 57 Richards Bay 53 Robertson 22 Skilpad s Gate 56 Stellenbosch 23 Upington 24 Van Rooyen s Gate 65 Vioolsdrif 29 Vredendal 25 Worcester 26 d) The next eight (8) digits is the client s Customs client number. e) The general code 70707070 will not be admissible. If the Customs client number is 5, 6 or 7 characters zeros, (0) should be inserted in front of the number to ensure that it is eight (8) characters long. f) The eleventh digit is an alpha character, which refers to the tax type. In this case the character will always be a C to indicate the Customs account. g) The last eight (8) digits refer to the date on which the payment is made. The format of the date can be ddmmccyy or ccyymmdd. The date format used is dependent on the bank s requirements. h) In all instances, proof of the successful transfer of the funds to the above accounts must accompany the transactions to be settled to the Customs Office. For this purpose the reference number information declared is essential. 2.5.1 Payment via e-filing a) e-filing is a secure electronic payment submission service offered by SARS, free of charge, which removes the risks and hassles of submitting manual payments b) SARS e-filing is supported by ABSA, FNB, Nedbank, Standard Bank, CitiBank and Investec. c) For more information go to www.sarsefiling.co.za or info@sarsefiling.co.za. 2.5.2 Cash a) In Branch Offices with a cash office, clients may make cash payments. b) The amount of coins received are limited to: Revision: 3 Page 5 of 11

i) Coins of R5 Maximum amount acceptable R50; ii) Coins of R2 Maximum amount acceptable R20; iii) Coins of R1 - Maximum amount acceptable R20; iv) Coins from 10c to 50c - Maximum amount acceptable R5; and v) Coins of 5c - Maximum amount acceptable 50c. c) All cash payments must be rounded off to the nearest 5 cents, to the benefit of the client. d) The rounding off principle applies to ordinary payments and deferments (applicable to cash payments only). e) The receipt issued to the client will display the actual amount payable. f) The following coin limits apply; i) Method of payment = Cash R10.00; ii) Transaction = R9.99; iii) Change should be 1c but because of rounding change will be 5c; and iv) Rounding shortage will be 4c. g) Counterfeit notes or dye stained bank notes will not be accepted. 2.5.3 Cheque a) Any cheque payment tendered at commercial banks must not exceed R500 000.00. b) Restriction on the value of cheque payments to R100 000.00 will be implemented in office by office approach, where the new Account Management System is implemented: i) Cheque payments made after the implementation of the new account management system at a Customs Branch Office may not exceed R100 000.00; ii) This applies irrespective of the number of declarations being paid; and iii) Furthermore, should multiple cheque payments be received, the total amount may not exceed R100 000.00. c) Each office where the new Account Management System is implemented will be announced and stakeholders informed. d) Example: if a trader makes one (1) or more cheque payments on a single day at the Customs Branch Office, the total value of the one (1) or multiple cheques may not exceed R100 000.00. This restriction is applied by trader and therefore multiple declarations may not be paid with one (1) or more cheques which exceed R100 000.00 on a day. e) The following criteria must be met before a cheque can be accepted: i) The words and figures on the cheque must correspond. ii) The cheque must be made out in any of the official languages (no abbreviation allowed). The beneficiary must be: A) English - South African Revenue Service B) Afrikaans - Suid Afrikaanse Inkomstediens C) IsiXhosa - Iqumrhu labaqokeleli berhafu emzantsi Afrika D) IsiZulu - Umnyango wokuquga intela eningizimu Afrika E) Tshivenda - Tshumelo ya Mbuelo ya Afurika Tshipembe F) Xitsonga - Hofisi ya vukorhokeri bya xibalo ya Afrika Dzonga G) Setswana - Tirelomatlotlo ya Afrika Borwa H) Sepedi - Tirelomatlotlo ya Afrika Borwa I) Sesotho - Tshebeletso ya matlotlo ya Afrika Borwa J) Siswati - Litiko letenstela sase Ningizimu Afrika K) isindebele - Umnyango ObuThelela iintela we Sewula Afrika iii) The cheque must be signed. Revision: 3 Page 6 of 11

iv) The cheque date must be correct. v) No alterations are allowed (not even when there is a signature next to the alteration). vi) The cheque may not be damaged (torn / wrinkled). vii) Cheques must not be foiled (adhesive tape on front of the cheque). viii) If post-dated, the date must not exceed 120 days. ix) All cheques exceeding an amount of R10 000.00 must be bank guaranteed. In this regard only single cheque payments are allowed i.e. only one (1) cheque per transaction. For example if a client must pay R50 000.00, one (1) cheque for the full amount must be deposited and not five (5) cheques to the value of R10 000.00. f) If payment is due e.g. today, no post dated cheques may be accepted. g) Cheque overpayments will not be reimbursed with cash. h) If the above mentioned rules are not followed, the cheque(s) will be dishonoured, and the payment will remain outstanding or unpaid 2.5.4 Travellers cheques a) Travellers cheques may be accepted, as long as they meet the criteria prescribed in paragraph 2.3.4 above. 2.5.5 Postal orders a) Postal orders may be accepted, as long as it meets the same criteria prescribed in paragraph 2.3.4 above. 2.5.6 Attorney trust and estate cheques a) Attorney Trust and estate cheques may be accepted, as long as it meets the criteria prescribed in paragraph 2.3.4 above. 2.5.7 Bank cheques a) Cheques issued by a bank (Bank cheques) may be accepted, as long as it meets the criteria prescribed in paragraph 2.3.4 above. 2.5.8 Credit / debit cards a) Payment of duty and VAT by credit card and / or debit card for accompanied travellers baggage is restricted to travellers (non-residents and residents) disembarking at the ports of entry where Passenger Processing System (PPS) is running. b) Payment of duty and VAT by credit card and / or debit card for unaccompanied traveller s baggage can only be facilitated at O.R. Tambo International Airport. c) A credit card and / or debit card may only be accepted if the importer or owner of the goods is the account holder. d) Only approved credit and / or debit cards shall be accepted. The type(s) of acceptable credit and / or debit cards will be indicated on a notice board posted at arrivals and on cashier booths. e) The use of credit cards and / or debit cards for the payment of duties and VAT are subject to the conditions of acceptance such as the validity of the card, expiry date etc. as prescribed by the contracted financial institution(s). f) Payment is to be effected in South African currency. Revision: 3 Page 7 of 11

2.5.9 Over the counter payment a) Payment may be made over the counter at FNB branches by merely quoting the appropriate beneficiary ID. The standard payment rules for compiling the 19-digit payment reference number for electronic payments applies. 2.5.10 Foreign payments a) Foreign currency payments will not be accepted, either in cash or cheque. b) However, a foreign cheque which is made out in South African currency may be accepted, as long as it meets the criteria as referred to in paragraph 2.3.4 above. c) Payments can be made electronically into the SARS banking accounts using the standard SWIFT payment method. d) In accordance with the new beneficiary ID process, use the following beneficiary account ID / account number when paying SARS from outside South Africa is SARS-FOR-999. e) SARS-FOR-999 must be used as the bank account number when completing a SWIFT 103 message. f) SARS's foreign payments are administered by all banks. g) The correct payment reference information must be provided to ensure that payments can be easily identified and correctly allocated upon receipt by SARS. The standard payment rules (see 2.3.1 above) for compiling the 19-digit payment reference number for electronic payments applies. h) The following represents an example of a completed SWIFT 103 message format utilising the following payment example: Taxpayer Name XYZ (Pty) Ltd, situated in the USA Customs Code Number 123456 Period Payable (Payment date) 2010-11-24 Amount Payable R 50,374-61 Effective Payment Date 2010-11-24 i) Applying the SARS payment rules, the following tax reference number and banking details should be used: 19 digit payment reference 1000123456C20082010 SARS Bank Account / ID SARS-Prov-999 Financial Institution First National Bank Ltd, SWIFT Address: FIRNZAJJ j) These fields would appear in the SWIFT 103 message as follows: Message Type 103 fields Field descriptions :20:BAFZMO93001 7737 Issuing (foreign) bank s reference :23B:CRED Bank Operation Code :32A:070820USD50374,61 Value Date, Currency and Settled Amount :33B:USD50374,61 Currency and Instructed Amount :50K:/091 969801 Payer Account XYZ (Pty) Ltd Payer Name PO Box 1234 Payer address UNITED STATES OF AMERICA Payer address :53A:/05002371 3 Sender's Correspondent :59:/SARS-FOR-999 Beneficiary Account Number SOUTH AFRICAN REVENUE SERVICE Beneficiary Name 299 BRONKHORST STREET Beneficiary Address SOUTH AFRICA Beneficiary Address :7O:4999999999V00072007 Remittance Information Revision: 3 Page 8 of 11

Message Type 103 fields :71A:0 U R :72:/ACC/FNB CORPORATE //RSA Field descriptions Details of Charges Sender to receiver info - e.g. Branch Details Sender's Reference k) Any queries regarding the completion of the SWIFT 103 message should be directed to First National Bank call centre 08601 FOREX (08601 36739) 2.6 Deficit (shortages) a) The client will be requested to produce the outstanding amount, or provide proof of payment (where applicable), if there is a deficit. b) If the client is unable to comply, the transaction will not be processed until the correct amount is tendered. 2.7 Cheque losses a) Clients will be notified of the physical loss of their cheques and it will be confirmed by SARS that the cheques had not yet been presented to the SARS banker at the time of the loss. b) Clients will be requested to: i) Arrange for a stop payment of the initial payment presented in favour of SARS; and ii) Reimburse SARS for the equivalent amount. 2.8 Source documents a) Documents that could be presented to the Cashier, other than the normal import declarations: i) DA 67 Slip for payment of Revenue to Customs and Excise; ii) DA 68 Application for Delivery of Goods Ex State Warehouse (State warehouse rent); iii) DA 70 Provisional Payment; iv) DA 73 Application for *Special / *Extra Attendance; v) DA 490 Departmental bill of entry; vi) DA 494 VOC Departmental bill of entry; and vii) P1.64 Payment of Miscellaneous Revenue. 2.9 Keeping records a) Every client must keep for record purposes for a period of five (5) years: i) Books, accounts and documents in respect of all transactions relating to the Rules for the purpose of any acquittal procedure; and ii) Any data related to such documents created by means of a computer. b) The five (5) year period is calculated from the end of the calendar year in which the document was created, lodged or required. (Sections 101 and 101A). c) Every client must produce such books, accounts and documents on demand. 2.10 Penalties a) Interest and penalties will be charged on any late payments, according to the applicable interest. b) Failure to adhere to the provisions of the Act, as set out in this document, is considered an offence. c) Offences may render the client liable to, as provided for in the Act: Revision: 3 Page 9 of 11

i) Monetary penalties; ii) Criminal prosecution; and / or iii) Suspension / cancellation of registration / license / accreditation. 2.11 Appeals against Decisions a) In cases where clients are not satisfied with any decision taken in terms of the Act they have a right of appeal to the relevant appeal committee. The policy in this regard, as well as the process to be followed, is contained in document SC-CC-24. b) Should clients be unhappy with a decision of any appeal committee their recourse will be to lodge an application for Alternative Dispute Resolution (ADR) with the relevant appeal committee. The committee will add its comments thereto and forward the application to the ADR Unit for attention. The policy in this regard, as well as the process to be followed is contained in document SC-CC-26. 3 REFERENCES 3.1 Legislation TYPE OF REFERENCE Legislation and Rules administered by SARS: Other Legislation: International Instruments: REFERENCE Customs and Excise Act No. 91 of 1964: Sections 39, 44, 45, 47, 91 and 105 Customs and Excise Rules: Rules 44, 45 and 201.00 South African Revenue Service Act No. 34 of 1997: Paragraphs 9(3)(c) and 22(1)(b) Value-Added Tax Act No. 89 of 1991: Sections 27 and 28 Bill of Exchange Act No. 34 of 1964: All Generally Accepted Accounting Practice (GAAP): All Generally Recognised Accounting Practice (GRAP): All Interpretation Act No. 33 of 1957: Sections 2 and 4 National Payment System Act No. 78 of 1998: All Promotion of Administrative Justice Act No. 3 of 2000: Sections 3 and 5 Public Finance Management (PFMA) Act No. 1 of 1999: Sections 7, 12, 21, 29, 40(1a),45, 76(2)(h), 51 and 55 Treasury Regulations issued in terms of PFMA Act No. 1 of 1999 April 2001: Part 5 paragraphs 11.3 and 15.4; Part 6 paragraphs 15.9 and 15.12; Part 7 paragraphs 7.1.1, 7.2.1, 15.4.2; 15.11;17.2 and 18 International Financial Reporting Standards (IFRS): All Kyoto Convention General Annex: Chapter 3 (Clearance and other Customs Formalities) Standards 3.8, 3.12, 3.41 and 3.43 Kyoto Convention General Annex: Chapter 4 (Duties and Taxes) All Standards Kyoto Convention Specific Annex J: Chapter 1 (Recommended Practise 15) 3.2 Cross References DOCUMENT # DOCUMENT TITLE APPLICABILITY FIN-CH-L20 Not Transferable Cheque Payments External All FIN-GP-02-G1 Reference guide - SARS Payment Rules All FIN-GN-02-G1-FAQ FAQ - SARS Payment Rules All SC-CC-24 Internal Administrative Appeal - External Policy All SC-CC-26 Alternative Dispute Resolution - External Policy All SC-DT-A-04 Customs Payment External FAQ All SC-CF-25 Provisional Payments External Policy All SC-PA-01-06 Excess Currency - External Policy All 4 DEFINITIONS AND ACRONYMS ABSA APT Amalgamated Banks of South Africa Air Passenger Tax Revision: 3 Page 10 of 11

Direct deposit When the client deposits money directly into the Customs Branch Office bank account. This can only be done at the bank on a bank deposit slip EFT Electronic Fund Transfer is used by a client to transfer money direct from his / her account to the account of the Branch Office via internet or efiling mechanism FNB First National Bank ID Identity Document Non-resident Not normally residing in South Africa and falls outside the definition of resident On time Refers to the prescribed periods according to Rule 201.00 and on or before the applicable date Payment The processing of EFT, Direct Deposit, Cheque or Cash Payments, etc, is a procedure that takes place when a Customs client need to settle a payment due for Customs and Excise duties, VAT, Provisional Payments, Penalties, forfeiture, interest, etc PD Resident SAP SARB SARS efiling Source document Traveller VAT Post Dated Includes: a) Any natural person who is ordinarily resident in South Africa; or b) Any natural person who complies with the physical presence test; and c) Any person (other than a natural person) which is incorporated, established or formed in South Africa or which has its place of effective management in South Africa, but: Excludes any person who is deemed to be exclusively a resident of another country for purposes of the application of any agreement entered into between the government of South Africa and that of other countries for the avoidance of double taxation Systems, Applications and Products South African Reserve Bank efiling is a secure electronic tax return and payment submission service offered free of charge by SARS. The service offers web-based capture of returns as well as convenient, reliable and accurate electronic payment facilities Any form as indicated in the list which is required to make a payment Any person who does not normally reside in South Africa and who temporarily enters or leaves South Africa; or any person who resides in South Africa and leaves or returns to South Africa Value-Added Tax 5 DOCUMENT MANAGEMENT Business Owner Document Owner Author Detail of change from previous revision Template number and revision Group Executive: Customs Operations Executive: Process Solutions Customs & Support Services J Magana Introducing new Account Management System Amending the limit on cheque payment from R500 000.00 to R100 000.00 for cheques that are tendered at SARS offices where SAP1 and Cash Desk for Cargo is used Amending paragraph 2.5.9 to reflect FNB as the only bank that accepts over the counter payment ECS-TM-02 - Rev 12 Revision: 3 Page 11 of 11