The ITA stands at the threshold of a new era for the local Information, Communication and Technology (ICT) Sector.  This representative body, together with its membership and industry partners, is poised to play a crucial role in the growth and development of the sector, as well as serving as a credible, effective channel of communication between various stakeholders.

To this effect, ITA members initiate issues, which need attention at international and national governmental, NGO, para-statal and business level.  Currently we are actively involved in addressing the following issues:

• Skills Development

• ISETT SETA Representation - The ITA has three representatives from our members on the ISETT SETA Board to ensure that there is a constant flow of credible feedback and that the input received from our members are tabled.

• SME Development Programme (Phakisa)

• IT Learnership

• e-Waste Management in the ICT Sector

• ITUC Exams

• Payroll Authors Group (PAG)

• ITA Recruitment Consultancy Service (ITARCS)

• ICT Charter - Industry representative

• SA Buro of Standards - Industry representative

• SARS Change in the Tariff Classification of Flat Panel Monitors - Collective argument on behalf of the ICT Industry

• The ITA is committed to working together with other industry associations to bring maximum value to our members!

ICT CHARTER

The Empowerment Charter for the ICT Sector is an industry-driven document being put together by major stakeholders in the ICT sector, together with valuable input from government represented, in part, by the Department of Communications and the Department of Trade and Industry. Currently, the working group involved in the development of the document comprises members of numerous related associations like the Black IT Forum (BITF), the SA Communications Forum (SACF), the Computer Society of South Africa (CSSA), the Electronic Industries Federation (EIF), Information Industry South Africa (IISA), Information Technology Association (ITA) and the South African chamber of Business (SACOB). As the ICT sector differs widely in terms of its stakeholders and their interests, this website is designed to capture comments from as many different perspectives as possible. It is a central aim of the working group that as many players as possible should be consulted and be given the opportunity of making input into the charter.

Sincere regards

The ICT Empowerment Charter Working Group

Contacts:
Nicole Sekelani +27 11 315 1319

Chairman: Dali Mpofu

For more information visit        www.ictcharter.org.za

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SA BURO OF STANDARDS (SABS)

All of us in the IT Sector are affected by the SABS Levies, which are imposed upon our products, in one way or another. The formulation of the various levies are compiled by the SABS and they then have a series of discussion workshops with relevant Stakeholders, prior to them finalizing the levy and submitting them to the Department of Trade and Industry, for final ratification.

The ITA is currently the only recognised representative body for the ICT Sector at these quarterly workshops and through this active participation we are able to provide our members with regular feedback and also raise important issues on their behalf.   We call upon any of our members that wish to be part of this process, or that have any issues that they would like us to address, to please the ITA offices.

Important Documentation Received from SABS:

Please find attached the Release form. The form is available at the SABS and is for the use of companies where the product they are importing does not have an LOA and the company need to obtain a LOA. The container will be stored in a warehouse and the product not to be sold until the LOA is obtained.

For detailed information regarding the form, please contact Mr. Cameron Ngwenya on 012 428 6974.

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SARS CHANGE IN THE TARIFF CLASSIFICATION OF FLAT PANEL MONITORS

BACKGROUND

The change in tariff regime can be summarized as follows:

1.                  Previously all PC monitors were classified under tariff heading 8471.60 of the Harmonized Commodity Description and Coding System (“HS”), on account of the fact that the older technology allowed for these monitors to be fitted only with data inputs, such as 15 pin D-sub connectors.

2.                  With the change in technology and use of personal computers (gaming, home entertainment, etc), the manufacturers of these flat panel monitors started fitting the monitors with video inputs, e.g. S-video, DVI, etc, in addition to the data inputs.

3.                  As a consequence of these monitors being fitted with video inputs, the South African Revenue Service (“SARS”) determined that such monitors are no longer exclusively or principally used with automatic data processing machines, and determined that such monitors be classified in tariff heading 8528.59.10 as video monitors, as provided for in the HS Explanatory Notes for tariff heading 8471.60 (prior to 1 January 2007) and tariff heading 8528.51 (from 1 January 2007).

THE CONSEQUENCE OF THE CHANGE IN THE TARIFF CLASSIFICATION

The effect of SARS’s determination is that it is now seeking to recover approximately 35% of customs duty retrospectively for two years from all importers who cleared PC monitors with video inputs as PC monitors under tariff heading 8471.60 (before 1 January 2007) or 8528.51 (after 1 January 2007), which was free of duty.

WHAT ARE THE OPTIONS?

The Customs and Excise Act, No 91 of 1964 (“the Act”) does, however, provide for a full rebate of customs duty on imported video monitors, provided that, at the time of entry of the goods, importers have in their possession a certificate from the SABS confirming that the monitors have a resolution of more than 600 lines. The rebate provision in question is rebate item 460.16 of Schedule No 4 to the Act.

The use of the rebate item will still result in zero customs duty being paid, and takes care of the importers’ liability going forward.

With regard to the two year retrospective liability for duty on PC monitors fitted with video inputs, a different approach needs to be taken, as a result of the following:

1.                  The SABS does not, as a rule, issue the resolution certificates retrospectively. Therefore, if the resolution certificates are obtained from a current date, they cannot be applied to previous imports;

2.                  If the SABS could be convinced to issue such certificates retrospectively, in order to utilize the rebate item retrospectively, previous duty paid (“DP”) bills of entry would have to be changed to general rebate (“GR”) bills of entry. The process for such an amendment is clearly prescribed in the Act, which requires that the DP entries be substituted with GR entries. However, such substitution may only be made within a period of six months from the date of the DP entry, which essentially means that substitutions in the present instance can only be made for imports of the last six months. This still leaves a liability for customs duty for a period of 18 months.

In view of the above, we propose that SARS be approached at the highest possible level with a request that the customs duty payable on all previous imports of PC monitors with video inputs should not be demanded from the importers. In this regard we further propose that any such submissions to SARS should be made by/on behalf of the ITA as a representative body of the industry rather than by/on behalf of individual importers.

It is also conceivable that certain technical arguments could be developed with regard to the classification of the monitors, which should also resolve this issue.

ENGAGEMENT AGREEMENT ITA/KPMG: TRADE & CUSTOMS CONSULTANCY SERVICES

We are pleased to confirm the arrangements for KPMG to provide consulting services to the IT Association (“the ITA”) as set out in the attached engagement letter (“the engagement letter”), including the anticipated scope of the work to be performed and the estimated fees to be incurred in rendering the necessary services.

SCOPE OF ASSISTANCE

KPMG will advise the ITA on its legal position regarding any retrospective claims for customs duties, VAT and penalty amounts as a consequence of the South African Revenue Service’s (‘SARS”) reclassification within the Harmonized System of flat panel (LCD and plasma) PC monitors, video monitors and televisions.

KPMG will research and develop technical arguments with a view to the reinstatement of the previous status quo with regard to the classification of monitors traditionally imported for sale and use with data processing machines.

KPMG will then engage SARS and the South African Bureau of Standards with the view of limiting the effect of SARS’ reclassification of the products in question to future importations of such goods, and to avoid the retrospective implementation of the re-classification.

Where and when required, KPMG will meet with SARS and SABS, and will make written representations to SARS/SABS to formalize any proposed methodology to resolve the matter and obtain the desired outcome, i.e. the limitation of the retrospective implementation of the re-classification.

ACTION REQUIRED

One of the many functions of the ITA is lobbying and negotiating at government level on behalf of its members and to this effect we have undertaken to coordinate all parties affected by this change in tariff classification to enable KPMG to present a collective argument to SARS and SABS.  If you are interested in receiving updates on this initiative contact ( This e-mail address is being protected from spambots. You need JavaScript enabled to view it. )

The Information Technology Association of SA has as a prime objective the promotion of consistent standards of professionalism and service in the information technology industry.  Specifically, all members of the Association are committed to act in a professional manner in their relationships with their customers,

their employees, fellow members and the public.  Members of the ITA warrant that they will:

CUSTOMERS

• At all times conduct business professionally and ethically and fulfil all agreements in good faith.

• Accurately represent their experience and capabilities and those of their employees or agents.

• Accept responsibility for assisting customers to effective information technology solutions.

• Offer for sale only goods or services for which they have the trading rights or ability to supply.

• Express clear and precise information in advertisements and statements issued to the media and, in agreements, avoid terms, which may be misleading or misunderstood.

• Disclose to prospective customers any particular interest, which they may have in goods or services, which they recommend.

• Treat as confidential all information learned about the business of a customer and to provide proper security for confidential information, records, documents and programmes.

• Comply with all applicable laws, copyrights, legislation and regulations in South Africa.

EMPLOYEES

• Provide good and safe working conditions, scope for job satisfaction and equal opportunities.

• Provide the opportunity for all employees to improve their skills and technical competence.

• Impress upon and remind employees of the confidential nature of the customers’ material and information.

• Insist upon professional behaviour and a high standard of service to customers.

• Ensure that employees are acquainted with this code.

FELLOW MEMBERS

• Recognise that disparagement of other members of the industry is unbusinesslike and damaging to the reputation of the entire industry.

• Refrain from recruiting employees for the purpose of obtaining trade secrets or contracts.

The General Manager responsible to the Management Committee (MANCO) for the day to day operations of the association.  The MANCO is responsible to the Executive Council (EXCO), who serves office for one year, is elected from ITA Member Companies, at the ITA AGM.  The EXCO directs the MANCO in the implementation of plans/strategies and shall form sub-committees or workgroups as are necessary to execute such plans and strategies.

(View Companies represented on ITA EXCO)

The ITA MANCO comprises very passionate and dynamic representatives from our Membership who volunteer their time and expertise to the ITA.  Each member of the MANCO is responsible for a specific portfolio when dealing with issues pertinent to the ICT industry.

• Chose Choeu, Managing Director Corporate Affairs, Eskom

• Janette Cumming, Director at Paracon and ITA Vice-President

• Adam Rabie, Divisional Managing Director at Bytes Technology Group

• Jimmy Morakile , Group Manager: Transformation at BCX

• Delani Higgins, Financial Manager: SAS Institute