Importers of low-value parcels destined for South Africa will soon pay value added tax, the country's tax authority said, as an interim measure to protect a clothing industry facing fierce competition from international e-commerce players such as Shein.
The move follows other countries, including the European Union, which is discussing abolishing its duty-free limit as part of a customs reform.
The South African Revenue Service said on Thursday that it "noted legitimate concerns that have been expressed in the importation of several goods, especially clothing, via e-commerce by a number of importers who have not been paying the obligatory customs duties and VAT."
This situation, it added, has resulted in "unfair competition."
Due to a high volume of e-commerce imports, SARS said it had earlier implemented a "concession" for goods valued at less than 500 rand ($27.25) which meant importers paid a flat rate of 20% in lieu of customs duties, and no VAT of 15%.
To address competition concerns and to provide clarity for e-commerce importers, SARS said it will introduce VAT in addition to the current 20% flat rate on low-value parcels on Sept. 1 as an interim measure.
Other changes include reconfiguring the 20% flat rate into the World Customs Organisation regime with appropriate duty rates by Nov. 1, it added.
Brick-and-mortar fashion and e-commerce retailers have urged South African regulators to impose a 45% import duty on all clothing imports, no matter the price, to level the playing field.
China-founded Shein, which plans to go public in Britain, attributes its success to its "on-demand business model and flexible supply chain."
Latest Stories
-
It is not too late for EC to build trust – Ibn Chambas
2 hours -
“With all due respect, Mr. President”, make elections 2024 a befitting legacy – Chambas to Akufo-Addo
3 hours -
GJA President calls for support of Media Freedom at Northern Regional GJA Awards
5 hours -
Trailblazing ballerina Michaela DePrince dies aged 29
7 hours -
Cher drops bid for conservatorship over her son
7 hours -
Anis Haffar: The persistent terrorism of galamsey
7 hours -
Paa Grant Medals for Excellence Award: Justmax Travels CEO named ‘Most Outstanding Entrepreneur of the Year’
10 hours -
South Africa’s Deputy President Mashatile collapses on podium
10 hours -
Evans Mawunyo Tsikata: Why resist an audit if you are clean?
10 hours -
You are a nation-wrecker if you live in Ashanti and vote for NDC – NAPO
11 hours -
2024/2025 GPL: Medeama SC secure back-to-back victories with win over Legon Cities
12 hours -
Ekow Yamson offers 10 Agriculture Q&As on NDC 2024 Manifesto
12 hours -
Embrace AI to remain competitive – Mark Okraku-Mantey to creatives
13 hours -
You’ve failed the creative industry – Sadiq Abdullai tells NPP gov’t
13 hours -
Photos: Day two of JoyNews/Ecobank 3rd mini Habitat Fair
13 hours