BURS, ATAF Peers Hit Hard By Border Closures

Pauline Dikuelo | Monday August 31, 2020 12:56

 

BURS, ATAF Peers Hit Hard By Border Closures

ATAF, which was established by African revenue authorities, noted that on account of the pandemic, its members have lost $400-500 million (between P4.6-P5.7 billion) during the period with the share of the loss in total customs revenue ranging from 5-10%.

ATAF’s policy brief on the erosive impact of COVID-19 on customs revenues in Africa has pointed out that much loss was more pronounced in April 2020 as it accounted for close to 24% of the total customs tax revenues.

“On average over the three-month 1st wave-COVID period, the 18 sampled countries lost 10% of the total customs tax revenues,” ATAF said in a statement .

The customs revenue loss analysis emphasised the existing threat to African tax administrations and their objective meeting customs revenue targets during COVID-19 pandemic.

In estimating the possible ripple effects of the close of borders across Africa on customs duty revenues, the study was conducted in 19 African countries that are members of ATAF, Botswana included.

The report further indicated that the pandemic is expected to bring about a major decline in tax revenue in most countries stemming from economic slowdown and tax policy administration measures taken in response. On the other hand, it is impacting trade as it affects customs border operations.

“Trade volumes would be expected to increase due to the growth in economic activity of any African economy. Alongside this expected increase is seasonality, a special characteristic of trade pattern which means that imports generally fluctuate at different times in a year,” it added.

 Equally, a reduction in the dutiable value for duty purposes regardless of the volume of trade. Thus while the trade volumes may be the same as previous months or higher, there could be a huge proportion of duty free goods benefiting from existing customs procedure codes with a provision for COVID-19 related goods such as masks, hand sanitisers, ventilators and hand washing soaps.