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
-
Syria’s minorities seek security as country charts new future
13 minutes -
Prof. Nana Aba Appiah Amfo re-appointed as Vice-Chancellor of the University of Ghana
20 minutes -
German police probe market attack security and warnings
21 minutes -
Grief and anger in Magdeburg after Christmas market attack
22 minutes -
Baltasar Coin becomes first Ghanaian meme coin to hit DEX Screener at $100K market cap
1 hour -
EC blames re-collation of disputed results on widespread lawlessness by party supporters
1 hour -
Top 20 Ghanaian songs released in 2024
2 hours -
Beating Messi’s Inter Miami to MLS Cup feels amazing – Joseph Paintsil
2 hours -
NDC administration will reverse all ‘last-minute’ gov’t employee promotions – Asiedu Nketiah
2 hours -
Kudus sights ‘authority and kingship’ for elephant stool celebration
2 hours -
We’ll embrace cutting-edge technologies to address emerging healthcare needs – Prof. Antwi-Kusi
3 hours -
Nana Aba Anamoah, Cwesi Oteng special guests for Philip Nai and Friends’ charity event
3 hours -
Environmental protection officers receive training on how to tackle climate change
3 hours -
CLOGSAG vows to resist partisan appointments in Civil, Local Government Service
4 hours -
Peasant Farmers Association welcomes Mahama’s move to rename Agric Ministry
4 hours