Review of the Diesel Refund System

SARS and the National Treasury are working on a review of the Diesel Refund System. SARS released an initial discussion paper on this in 2017 (attached). SARS held follow-up stakeholder workshops in late August 2018.

Key proposals include:

1. A standalone diesel administration system, separate from the VAT system.
2. That the basis of the diesel refund administration be shifted to qualifying primary production activities and away from the current emphasis on allowed users. The type and nature of qualifying activities and use necessary for such primary production is provided in an indicative list in Annexure 1 of the attached discussion paper. Note the discussion paper listed primary production activities that could be considered the list will be finalised through the public comment process.

We now have an opportunity to provide inputs on the list of primary production activities. Some commodities use most of their diesel on the farm, whilst others use most on public roads (for example, vegetable farming). To cover the interest of both types of users – we propose recommending that – i) Single use vehicles – on farm use: should qualify for the maximum refund with minimal log book requirements & ii) Dual purpose vehicles – on road use: should also qualify, but with more detailed log book requirements than for single use vehicles.

With this background, SARS has requested Agri SA to provide input on:

• The  specific primary production activities within each commodity, including the processes involved in these activities and furthermore,
• a list of the various vehicles used to perform these activities, also classifying the vehicles as “single use” or “dual purpose”

Note: single use vehicles would typically be used on the farm, whilst dual purpose vehicles could be used on the farm and on public roads – for example, a bakkie.

Please review the relevant attached Excel document (either farming of forestry) listing primary production  activities and forward your inputs on the specific primary production activities and processes within your commodity group, as well as the various vehicles used, please specify whether it is single use or dual purpose. Your inputs can be sent to info@kwanalu.co.za

REVIEW OF THE DIESEL FUEL TAX REFUND

Primary Activities – Diesel – Farming

Primary Activities – Diesel – Forestry