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<\/a><\/figure>\n\n\n\nTo address this issue, SARS and Customs have committed to levy the same duties and taxes on clothing items under R500 as on bigger orders.<\/p>\n\n\n\n
South African Revenue Service (SARS) Commissioner Edward Kieswetter said they would continue to clamp down on Temu, Shein, and other online retailers.<\/p>\n\n\n\n
Chinese online retailers, including Temu and Shein, have been in the firing line in recent months for using tax loopholes to undercut South African competitors.<\/p>\n\n\n\n
They are accused of abusing the de minimis rule to get clothing parcels of under R500 through customs with a 20% import duty and 0% VAT.<\/p>\n\n\n\n
Retailers claim Temu and Shein break up larger orders into smaller quantities and packages to ensure they are under R500.<\/p>\n\n\n\n
Once they have benefitted from the lower 20% tax, they combine these orders again before shipping them to clients.<\/p>\n\n\n\n
South African clothing retailers complain they must pay the 45% plus value-added tax (VAT) for imported clothes.<\/p>\n\n\n\n
National Clothing Retail Federation (NCRF), Michael Lawrence said their research points to widespread abuse by Temu and Shein.<\/p>\n\n\n\n
\u201cThese companies are not paying duties on their imports and are avoiding paying VAT where it should be applied,\u201d he said.<\/p>\n\n\n\n
He explained that these eCommerce giants’ local couriers and service providers are not reporting their duties and taxes correctly to SARS.<\/p>\n\n\n\n
\u201cThere have not been any invoices that show the correct revenue collection from authorities about VAT and tariffs at this point,\u201d he said.<\/p>\n\n\n\n
Lawrence claimed the details were either incorrectly declared or miscategorised on the invoice.<\/p>\n\n\n\n
The NCRF reported the culprits to SARS and requested that the Department of Trade, Industry, and Competition investigate the matter.<\/p>\n\n\n\n
The higher taxes put local retailers at a big disadvantage in trying to compete against direct-from-China importers like Temu and Shein.<\/p>\n\n\n\n
Jean-Louis Nel, tax director at Van Huyssteens Commercial Attorneys, said this is uncompetitive because it does not stimulate the local market.<\/p>\n\n\n\n
It puts South African retailers under a great deal of pressure because consumers will prefer lower-priced items.<\/p>\n\n\n\n
TFG CEO Anthony Thunstr\u00f6m said local retailers have been working with the South African Revenue Service and Customs to create a level playing field.<\/p>\n\n\n\n
\u201cIt\u2019s a big move, and I think it will help local industry, including local production and jobs,\u201d said Thunstr\u00f6m.<\/p>\n\n\n\n
SARS responds<\/strong><\/p>\n\n\n\n To address this issue, SARS and Customs have committed to levy the same duties and taxes on clothing items under R500 as on bigger orders.<\/p>\n\n\n\n<\/a><\/figure>\n\n\n\n