The South African Revenue Service (SARS) has announced a new tax crackdown targeting Chinese e-commerce giants Shein and Temu. This change follows accusations from local clothing retailers and stakeholders in the textile industry that these companies were exploiting a tax loophole to keep their import prices low.

Under the de minimis rule, Shein and Temu were able to import clothing parcels valued under R500 with a 20% import duty and 0% VAT, while local retailers faced a 45% plus VAT rate for imported goods, creating an uneven playing field. A longstanding concession document allowed for high-volume, low-value shipments to be processed with a flat 20% fee monthly to facilitate trade and reduce customs burdens. This crackdown aims to address these disparities and ensure fair competition within the industry. This is set to take place from the 1st of July 2024

To further unpack we are joined on the line Brenden Rorberts, founder and Director of Black and White Advertising as well as Simon Eppel Director and Researcher at The Southeren African Clothing and Textile Workers’ Union