The South African government plans to review a VAT exemption on certain low-value goods imported from overseas, targeting the e-commerce industry in particular.
This was revealed in the National Treasury’s Budget Review document for the 2025/2026 financial year, published alongside finance minister Enoch Godongwana’s budget speech on 12 March 2025.
While it did not specifically name any companies, the import tax practices of Chinese e-commerce retailers Temu and Shein have been in the spotlight since early 2024. Industry sources alleged the problem was a South African Revenue Service concession from 2007, which allowed them to pay a flat duty rate of 20% without VAT on low-value imports below R500.
This high duty aims to protect the local textile industry, which has been bleeding for many years due to imports from Asian countries, where labour and materials are much cheaper.Sars responded by announcing it would start levying the entire 45% clothing tax on all applicable imports, including those valued under R500, from 1 July 2024.
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