As diesel for farm-use is not utilised for road-going vehicles, I believe that the rebate is more of a right than a privilege. In practice, however, a farmer must supply the South African Revenue Services (SARS) with an unreasonable number of forms and other types of proof to obtain the refund.
Anyone who has seen the example of the information required in the logbook on the SARS website (sars.gov.za) will agree with this. The logbook has no fewer than 16 columns for the tractor driver or diesel machine operator to fill in!
For a start, a tractor used for fieldwork has to have a functioning hour meter and the time measured by this must be recorded. But many of the tractors that I have seen are without such features. The point is that, although, practically speaking, a field tractor does not require an hour meter and other sophisticated gadgetry to do its work, SARS thinks otherwise for purposes of the rebate.
Worse, having working hour meters, trip meters and the like is no real guarantee of success, because the teams from SARS are seemingly on a mission to catch out the farmers. So, you might have functioning equipment and the right registers, but what if your maths is subject to the odd mistake?
You guessed it. No rebate and possible penalties. Who has a live-in chartered accountant who can operate a tractor on his farm? Not many farmers, I’m sure, and mistakes will happen.
A possible alternative
In the past, under Schedule 6 of the Customs and Excise Act, which deals with these rebates, a farmer could lose 20% of the rebate if SARS had some doubts about the veracity of his claims. What SARS is doing is adding to the cost of farming, a sector already under great financial stress. As a possible solution – and one that would perhaps work better than a slavish paper chase, with the accompanying time investment required to maintain records – farmers who still want to obtain the rebate should be allowed to submit records of diesel usage over time.
Month-on-month averages should then be allowed by SARS as a matter of course – and if the farmer wins a little, well, let’s face it, who deserves it better?
If the farmer then wants a higher rebate due to higher usage, he should have to prove that, for that particular time period. It’s far easier than chasing paper.
Make your own fuel
A second option might be for farmers to make their own fuel, and not worry about the government rebate at all. Fuel without taxes and rebates would cost roughly half of the price at the pumps!
In fact, the way things stand now, making your own fuel would probably be less of a bother than trying to convince SARS that you are entitled to your rebate!
This article was originally published on 15 January 2016 in Farmer’s Weekly.