Many South Africans prefer to purchase clothing from international online stores which are now paying higher import duties.
Law firm Webber Wentzel believes the import duty changes implemented by the South African Revenue Service in the coming months will make importing small, low-value items less economically attractive.
The 20% rate will then be restructured on 1 November 2024 to align with the World Customs Organisation framework. They explained that import VAT is calculated based on the total value of goods and customs duties, with a 10% upliftment in customs duty value.The representatives warned that the changes could result in effectively increasing the VAT rate for certain categories of imported goods due to higher customs duty rates.
However, this should encourage consumers to shop from South African retailers, benefiting the domestic economy and creating more opportunities for local businesses while reducing market clutter. For reference, SARS’ trade statistics for June 2024 show that China is the primary source of textile imports for South Africans, with an average monthly import value of around R4.2 million.“The South African Revenue Service remains committed to providing clarity and certainty in the implementation of its mandate of promoting legitimate trade for the economic development of the country in an era of rapidly expanding e-commerce,” it said.
This will include a greater use of data, artificial intelligence, machine learning, and algorithms to facilitate trade while mitigating risks to the economy.
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