South Africa scraps import tax breaks - Shein, Temu caught in crosshairs
This could lead to International e-commerce companies raising prices to account for the new cost
Big changes are coming to how South Africa handles imported goods, and if you love scoring deals from sites like Shein and Temu, you might want to pay attention. The South African Revenue Service (SARS) is moving to scrap over 140 tax breaks and simplified customs processes that made importing cheaper and easier.
This would mean the end of a long-standing concession that allowed small shipments or shipments under R500 to be taxed at a flat 20% rate with no VAT—an advantage that helped international e-commerce giants keep prices low.
Local businesses have long argued that these concessions put them at a disadvantage. While Shein and Temu benefited from the flat-rate duty, South African retailers importing similar goods faced standard import duties of up to 45% plus VAT. The removal of these concessions, SARS claims, will level the playing field by ensuring that all businesses are subject to the same tax structure.
Import and export concessions are essentially special allowances that reduce taxes, duties, or administrative requirements for businesses engaged in cross-border trade. These policies have historically been used to stimulate industries, ease logistics, and attract investment. However, SARS has determined that many of these concessions are outdated, with some dating back 20 years and no longer aligning with current economic and trade policies.
Emmanuel Oyedeji
Beyond e-commerce, the removal of these concessions will impact several industries. Wine exporters in Cape Town, perishable goods traders, and duty-free shops at OR Tambo International Airport have all benefited from reduced bureaucratic requirements and tax exemptions. With these benefits being phased out, businesses may experience delays, increased costs, and logistical challenges that could ultimately affect consumers.
SARS justifies this overhaul as part of its plan to align South Africa’s customs policies with international standards, particularly the World Customs Organisation (WCO) clearance guidelines. While the decision is official, businesses have until mid-April to provide feedback, offering a narrow window for potential revisions.
This policy shift also comes at a time when South African consumers are already dealing with price increases in various industries. Even local companies, such as MultiChoice’s DStv and Showmax, have announced price hikes due to an upcoming VAT increase in May. As the cost of imports rises, consumers may need to prepare for further financial strain in the months ahead.
Louis Eriakha
