The South African Revenue Service (Sars) is facing criticism from local retailers over its handling of e-commerce import taxes. Concerns have been raised about the alleged tax avoidance practices of Chinese retailers like Shein and Temu. Sars has responded by implementing changes to the import tax system, including a temporary 15% VAT on imports below R500 and a plan to adopt the World Customs Organisation's framework for e-commerce goods.
Uncertainty surrounds the taxes on international e-commerce imports to South Africa , as the country’s taxman has kept quiet on important changes in its customs import system implemented late last year. In the past few months, several reports have claimed that the South Africa n Revenue Service ( Sars ) is clamping down on Shein and Temu ’s alleged dubious tax practices.
In early 2024, disgruntled local retailers alleged that the Chinese retailers were getting their goods into the country on the cheap by splitting items into separate consignments, exempting them from import taxes. It was claimed that the mechanism they used to keep their import taxes low was a special Sars concession for imports below R500. First implemented in 2007, the concession allowed logistics companies to pay a flat duty rate of 20% with no VAT on these items. The measure was necessary to speed up customs clearance processes as e-commerce activity started picking up pace in South Africa. The complaints from local retailers and the textile industry, particularly regarding clothing products, led to Sars announcing it would put this plan on hold “until further notice”. As an interim measure to address local industry’s concerns, it started levying 15% VAT in addition to the 20% flat duty on all imports with values under R500 from 1 September 2024. Sars also said it would reconfigure the current 20% flat rate for low-value orders into the World Customs Organisation (WCO) Framework for the processing of border-crossing e-commerce goods, effective 1 November 2024. The WCO’s release and clearance procedures were developed in the early 1990s to address the large numbers of small or negligible-value goods carried between countries by courier and express mail service
E-Commerce Import Taxes South Africa Shein Temu Sars Retail Customs
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