Forestry industry takes on diesel rebate

A Forestry SA (FSA) submission to SARS notes that diesel costs have “a major bearing on the profitability of timber operations.” FSA’s first concern is that the rebate system has “onerous reporting requirements” when it comes to the filling in of diesel-use logbooks.

Requiring a farmer to record a tractor’s exact diesel usage for ploughing in the morning, for example, then driving many kilometres to top up its tank again before hauling timber in the afternoon – for which an exact diesel usage record would also be required – was “totally impractical and extremely costly”.

FSA proposed that SARS allow forestry operations to record individual machinery’s diesel usage for forestry-related work on a monthly basis.

FSA also wanted SARS to allow forestry operations to claim diesel rebates on the transport of wattle bark. FSA said that despite wattle bark being “a major forest product”, SARS currently deemed the transport of this product from plantations to processing facilities as non-rebatable diesel usage.

Similarly, FSA wanted SARS to allow forestry operations to be allowed to claim tax rebates on diesel used to collect forestry workers from their off-farm homes and to deliver them home again after the working day concluded.

Finally, FSA urged SARS to allow forestry operations to claim rebates on diesel usage for road haulage vehicles returning empty from having delivered forest products to processing facilities.

“Timber trucks are designed specifically to transport logs [and wattle bark]. They cannot transport any other products. They cannot, therefore, travel back from a processing plant with other cargo – they are empty,” said FSA.