Shein grew to become the worlds largest fashion retailer as of 2022. (Stanislav Kogiku/SOPA Images/LightRocket via Getty Images)
- Chinese fast fashion retailers like Temu and Shein have been paying duties of 20% (or less) if their clothing packages cost under R500.
- SARS says it is still discussing when to start charging 45% tariffs, plus VAT, on small cut-price clothing imports.
- SA’s clothing industry hopes the higher tariffs will “level the playing field” and help it compete against a flood of cheap imports.
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The SA Revenue Service (SARS) says a date is yet to be set for imposing 45% tariffs, plus VAT, on small cut-price clothing imports flooding the SA market from brands such as Shein and Temu.
SARS spokesperson Siphithi Sibeko said on Monday that the agency was consulting with the industry before upping the tariff on imported clothing, textiles, and footwear costing under R500. “The consultations are still under way,” he said.
Sibeko said SARS and the retail industry, including parcel delivery companies, are still discussing an implementation date. The agency doesn’t want to “arbitrarily” set a date, causing a rush to comply.
He said that the revenue collection agency had never set a hard date for the rules and that there appears to be some confusion over reports of a communicated date, which is not the case.
SA’s struggling clothing industry and unions have long called for the government to crack down on rules they say benefit online fast fashion retailers such as China’s Shein and Temu.
These retailers, whose ad blitzes have flooded South African social media, routinely pay duties of 20% or less on clothing parcels sent to customers in SA if the price is under R500. Import rules allows packages costing below R500 to be imported with a 20% duty and no VAT.
But local retailers and clothing sector workers say they can’t compete with such rock-bottom process and both organised labour in the industry and local retailers have welcome the move as necessary to create a level playing field.
READ | Shein, Temu packages to be taxed at full import duty – to relief of unions, business
Sibeko said that charging higher tariffs for imports was a complex issue with many stakeholders, all of whom must be consulted before finalising the tariff.
Once implemented, parcels of imported clothing, textiles, and footwear costing R500 or less will be taxed at 45%, plus VAT. Clothing and textiles costing over R500 are already supposed to be taxed at these higher rates.