Need for e-commerce regulation highlighted by cheap imports

Two Chinese e-commerce sites offering cheap products posed a threat to both importers and local manufacturers in South Africa, clothing retailers said, prompting them to stress that the cheap imports violated rules minimum rule.

This comes after Shein and Temu were found to have failed to pay the SA Revenue Service (Sars) excise duty of 45%.

In response, Sars issued a statement saying that from 1 July, all clothing purchased via e-commerce must be declared separately and a 45 per cent duty will apply in addition to VAT.

There is concern that SARS has chosen to target a particular sector, which could be seen as a form of favouritism, although the move has been welcomed.

A cause for concern, for example, is that imported footwear, which is subject to an average duty of 30% or R5 per pair (whichever is higher), currently does not need to be declared separately and only a flat rate of 20% applies.

This did not create a level playing field as intended, but this is of course a matter of interpretation.