The South African Revenue Service on July 1 started charging an import duty of 45 per cent plus value-added tax (VAT) on all clothing, up from a tariff of 20 per cent previously imposed on low-value parcels, as part of efforts to stop Chinese-backed shopping platforms like Shein and Temu from undercutting domestic retailers.
Several local retailers have accused those platforms of abusing a so-called de minimis rule, which charged an import duty of 20 per cent and zero VAT on clothing parcels valued at under 500 rand (US$27.44), according to a report on Wednesday by local media News24.
They claimed Shein and Temu had been breaking up larger orders into smaller packages that cost below 500 rand. After getting the lower tax, the orders are combined again before these are shipped to buyers.
Another TikTok user, with the handle _Kgadii, shared a similar experience. “Temu is also expensive,” she wrote, pointing out that her 397-rand order for two pairs of pants and a smartphone case resulted in a tax bill of 178 rand.
Various South African users on TikTok have been sharing tips to save money under the higher import duty regime, such as ordering clothes combined with light items like cosmetic products.
The action taken by South Africa’s revenue authority shows how low-cost goods from mainland China could potentially be subjected to higher tariffs and scrutiny in other countries, as more domestic retailers are put at a disadvantage by cheap items sold by the likes of Shein and Temu.
South Africa’s revenue service commissioner Edward Kieswetter said that the country lost more than 3 billion rand owing to the loophole exploited by international online retailers, according to a report on Wednesday by News24. He said the government would continue to crack down on the “unfair advantages” created by these retailers.
