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Diesel rebate system
The diesel rebate once again received priority attention during this reporting period. Delays in the
payment of the diesel rebate and VAT claims caused producers to experience major cashflow prob-
lems. Some delays in pay-outs were without reasons given by SARS, while others were due to audits
being done, problems with communication and interpretation of logbook entries. Frequent meetings
were held with SARS head office in this regard.
SARS published the new diesel rebate system in the Government Gazette on 18 March 2022, but the
implementation date is still awaited.
Grain SA and Agri SA were involved in the review of the diesel rebate sys-
tem from the beginning, when the process kicked off in February 2017.
The main aim of the review was to deal with irregularities in the
current system.
After consultation with our members, Grain SA and Agri SA
commented on the proposals and also attended various con-
sulting workshops where these mandates were discussed.
Grain SA and Agri SA are disappointed that SARS unilater-
ally made certain changes, notwithstanding the objections
to them and the risks they involved.
Some of the changes that are being disputed are:
At the time of the consultation there were two very specific
‘open’ proposals that created uncertainty and could deter-
mine the ultimate success or failure of the newly proposed
diesel rebate system.
These two proposals were:
1. The extent of the diesel rebate
The extent of the diesel rebate in agriculture is *** cents per litre of the general fuel levy and *** cents
per litre of the Road Accident Fund levy of the diesel that is used in eligible agricultural activities.
Grain SA strongly advocated that the diesel rebate should constitute a certain percentage of the gen-
eral fuel levy and the Road Accident Fund levy, as it is currently (100% of the RAF and 40% of the fuel
levy). This would ensure that the repayment remains in line with its aim to offer certain non-road users
involved in eligible primary activities relief with respect to the road-related tax burden, and support the
competitiveness of agriculture. If this is not done, the intent of the repayment will miss the target.
SARS published the extent of the diesel rebate on 18 March, and it is 32% of the general fuel
levy and 80% of the RAF levy. Although there were discussions about the burden of accidents
involving farm equipment on the RAF, this burden could not be proven. At the time of the
discussions Grain SA made a strong presentation in this regard.
2. Logbooks: storage, use and simplified logbooks
Keeping a logbook is an essential part of the proof of eligible purchases and the use of diesel. In
the current diesel rebate system a lot of the grey areas and alleged non-compliance are the result of
draconic expectations as to what a logbook should look like and differences in interpretation regard-
ing the expectation of details required in logbooks.
Cognisance is taken that proposed logbooks referred to in Schedule 6 will be published for comment
only at a future date. This leaves open a critical portion determining the success of the diesel rebate.
A request has been submitted that requirements for logbooks be discussed before the next phase of
consultations.
Other critical factors that Grain SA and Agri SA feel were not heard by SARS and the Treasury:
Permitting contractors to qualify for the diesel rebate on a so-called ‘wet basis’.
INPUT AND PRODUCTION OVERVIEW
CERTAIN CHANGES
are disappointed
unilaterally
THAT
MADE
GRAIN SA AND AGRI SA
SARS