On 1 August 2021 an export duty will become payable on scrap metal exported from South Africa.  The export duty will be payable on both imported and locally procured metals and includes exports to all countries, except those countries which benefit from trade agreements.

The duty will be payable on the following metals:

Heading / SubheadingArticle descriptionGeneralEU / UKEFTASADCMERCOSURAfCFTA
7204.10Waste and scrap of cast iron20%10%FreeFree20%20%
7204.21Waste and scrap of stainless steel15%10%FreeFree15%15%
7204.29Waste and scrap of alloy steel (other)20%10%FreeFree20%20%
7204.30Waste and scrap of tinned iron or steel20%10%FreeFree20%20%
7204.41Turnings, shavings, chips, milling waste, sawdust, filings, trimmings and stampings, whether or not in bundles [of ferrous scrap]20%10%FreeFree20%20%
7204.49Other [ferrous scrap]20%10%FreeFree20%20%
7204.50Remelting scrap [ferrous] ingots20%FreeFreeFree20%20%
74.04Copper waste and scrap10%10%FreeFree10%10%
76.02Aluminium waste and scrap15%10%FreeFree15%15%

The value on which duty will be payable is the “free on board” value of the metals.  This will include all costs and charges, including the loading of the metals onto a ship or vehicle that will export it from South Africa. The value to be used is not the PPS value or any index value derived from a source such as the Metal Bulletin.

SARS has started accepting test export declarations through its EDI system.  They further indicated that pre-clearance of exports will be allowed, although it is not clear how far in advance of the export they will actually allow. Export declarations may therefore be submitted and processed before actual shipment of the metals.  This may change.  The Customs and Excise Act makes provision for the Commissioner to prescribe the time when an export declaration can be submitted.

According to SARS, the export duty will replace the current Price Preference System (PPS).  However, The Department of Trade, Industry and Competition indicated that they want to extend PPS by another 2 years to run concurrently with the export duty. SARS were unaware of the proposal to extend PPS by 2 years, but it is not clear that much can be done by SARS to stop the 2 running concurrently as they don’t set the policy for either the PPS nor the export tax.

If you want to know more, or would like to discuss any of the amendments in detail, please mail us on info@xa.co.za.

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