SARS to implement stricter tax measures against platforms like Shein and Temu


By Staff Reporter

POLOKWANE-The South African apparel industry has expressed strong support for the government’s new regulations on de minimis rules, which are set to increase the cost for Chinese retailers like Temu and Shein to import goods into the country at lower prices.

The new regulations stipulate that parcels from Chinese retailers valued below R500 will be taxed at the same rate as those paid by local clothing retailers, which is 45% plus Value Added Tax (VAT).

For years, the SA apparel industry has accused these international retailers of exploiting de minimis rules by importing an exceptionally high number of small orders to minimize duties. These practices have posed significant challenges for local businesses trying to compete on a level playing field.

Michael Lawrence, executive director of the National Clothing Retail Federation (NCRF), welcomed the government’s decision, emphasizing its urgency and necessity. “We are pleased with this news. It is a move that was urgently needed to ensure fair competition and support our local industry,” Lawrence stated.

The NCRF represents major local retailers such as TFG, Truworths, Woolworths, Mr Price, and Cotton On. These companies, along with the Southern African Clothing and Textile Workers Union (Sactwu), have been actively lobbying for the South African Revenue Service (SARS) to implement stricter measures against platforms like Shein and Temu for the past two years.

The new regulations aim to curb the influx of low-cost imports that undermine local retailers and the broader apparel industry. By imposing the same tax rates on smaller parcels, the government seeks to create a more equitable marketplace, fostering growth and sustainability for South African businesses.

Sactwu has also lauded the government’s action. The union has been vocal about the detrimental impact of these practices on local jobs and the economy. “This is a significant victory for our industry and our workers. It will help protect local jobs and ensure that our clothing and textile sector can thrive,” a Sactwu spokesperson commented.

As the regulations come into effect, the South African apparel industry is optimistic about the positive changes they will bring. The move is expected to discourage the flood of low-cost imports and boost the competitiveness of local retailers, ultimately benefiting the national economy and workforce.

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