Consumers win as SARS delays higher tax on Shein and Temu

The South African Revenue Service (SARS) is delaying the implementation of a 45% tariff on clothing imported into South Africa.

The move would have addressed the tax loopholes that Chinese online retailers, Temu and Shein, are currently benefiting from.

A statement from the South African International e-commerce Association (SAIEA) says it received correspondence from SARS highlighting 'the need for further stakeholder engagement'.

The Money Show gets comment from representatives of SAIEA and the National Clothing Retail Federation (NCRF).

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SAIEA chairperson Dudley Filippa says the development is to be welcomed as an opportunity to engage with the revenue service to create an environment where they 'can find perhaps middle ground'.

Filippa is of the view that increasing the import duty would not hit the likes of Shein or Temu as hard as it would hit the local consumer.

"There are two sides to every story, and over the past six months or so only the one side has been heard... This is actually an opportunity for particularly our lower income earners to buy a very necessary item - clothing. It's a matter of affordability."

"Shein and Temu operate in 150 countries very successfully, but the impact will be felt with regards to jobs... These companies have created jobs for mainly young people and created an opportunity for jobs for courier services, so there will be more impact on the person in the street than on Shein and Temu."

Dudley Filippa, Chair - South African International eCommerce Association

NCRF executive director Michael Lawrence disagrees about the sectors where job losses will actually be experienced.

He says courier services will be delivering small parcels in any event, but it's a different story for the local clothing industry if the increased charge is not levied on the Chinese companies.

"Where we will be losing jobs is in the manufacturing sector and our more mainstream retail sectors where everybody's having to pay the full 45% because Sars is not giving that concession away in the same way which they're doing for these offshore online retailers."

"So we do have a substantive problem with the fact that this is a commercial disruptor that Sars is in fact playing in a commercial space. They need to get their game right now; you charge the same tax for everyone for all the right reasons.

"If they can make the tax lower for us, we'll take that as well."

Michael Lawrence, Executive Director - National Clothing Retail Federation

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