12 December 2012

Southern Africa: SACU Ministers Consider 2013/14 Revenue Share

Swakopmund — The Southern African Customs Union (SACU) ministers meeting of last Friday in Swakopmund discussed the allocation of revenue share, with the ministers looking at the recommended allocation of revenue share to Botswana, Lesotho, Namibia, Swaziland, and South Africa for 2013/14.

The quarterly meeting took place at a time the regional economy, and economic performances of the five-SACU member states, are under considerable pressure from the sluggish global economy.

Growth in advanced economies is too slow to make a dent in rising unemployment, while emerging markets are revising their once-buoyant overall economic growth prospects for 2012. The expected global recovery remains fragile with a number of uncertainties.

"Unemployment is most likely to stay elevated in many parts of the world and financial conditions will remain fragile. Africa will not be spared, therefore as a region, we need to consider whether the global economy is just hitting another bout of turbulence in what was always expected to be a slow and bumpy recovery or whether the current turbulence will stay with us," the Botswana Minister of Finance and Development Planning, Ontefetse Matambo, told fellow ministers and senior government officials at the meeting.

"We need to position ourselves and respond to these challenges by developing our imperatives and also put policies in place to mitigate against the impact of the sluggish global growth to protect poor households," said Matambo.

The council also considered the report on the ongoing review of the Revenue Sharing Arrangement. The task team working on the Revenue Sharing Arrangement met to consider the terms of reference for the study on the dynamic effects of the expansion of SACU membership.

The objective of the study is to provide an independent evaluation of the dynamic effects of expanding SACU membership. An external independent consultant will undertake the study. It is anticipated that the outcome of this study will be used to inform the process of the review of the current revenue sharing arrangement.

Other topics on the agenda included the issue of trade facilitation, and reviewing the process of implementing the three-year comprehensive customs reform and modernisation programme as part of an effort to promote trade facilitation and develop modern customs administrations in the SACU area.

The implementation started in January 2010 and has to date enjoyed the support of the World Customs Organisation (WCO) and the Swedish International Development Agency (SIDA). The overall objective of the programme is to contribute to the development of a sustainable and improved economy in the SACU area with regard to trade, security and social protection through the development of customs authorities as fair and effective trade management partners, as well as modern social protection and revenue collection services.

The programme is also aimed at assisting the member countries of SACU to comply with international customs instruments and to modernise their respective customs administrations. A number of pilot initiatives have been started under this programme.

In November 2012, the WCO and SIDA agreed to extend their support and funding for this programme for an additional year. The ministers further considered the report on the terms of reference for a study on the harmonisation of estimation of taxes on products in the compilation of the Gross Domestic Product (GDP) among the member states.

A study group of officials who compile the data on excise and customs duties among SACU member states would undertake the study, with the support from technical experts from some international organisations.

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