The South African Revenue Services(SARS) has announced its intention to withdraw custom concessions currently in use for business that do not comply with existing regulations.
This move could have a significant effect on global e-commerce platforms, including Shein and Temu.
What are customs concession?
Customs concessions refer to special allowances or deviations from standard customs duties and procedures, granted to certain importers or exporters.
According to AccountingWeekly, these concessions typically aim to facilitate trade, support specific industries, or encourage economic activities by reducing or simplifying customs obligations.
Shein, Temu, and other businesses have been making use of special concessions under the Customs and Excise Act.
These may have included lower import duties, simplified customs processes, or exemptions from certain compliance rules.
SARS Review and Rationale for Withdrawal
In a notice issued by SARS, it has determined that these concessions go beyond the legal authority allowed by the law and making them invalid.
It stated that some concessions date back 20 years and were granted for a specific purpose at the time, that are no longer applicable.
So, in an attempt to ensure compliance with the Act, SARS intends to withdraw all these concessions that traders rely on.
According to BusinessTech, SARS aims to stop Chinese retailers, including online platforms like Shein and Temu, from clearing products at customs using a simplified process with a 20% flat duty rate.
Taking away these concessions could have a big impact on Shein, Temu, and other businesses in South Africa.
Without these special allowances, they might have to pay higher import duties, go through stricter compliance checks, and deal with increased operating costs.
Opportunity for Businesses to Respond
SARS stated that businesses will now need to ensure they are fully compliant with the current Act, without relying on outdated concessions.
Companies may also need to adjust their operations and procedures to align with the updated legal requirements.
SARS stated that the withdrawal of concessions could lead to increased costs for businesses that previously benefited from special allowances or arrangements
The process is open to feedback, with SARS giving stakeholders until 23 April 2025 to comment.
Stakeholders who believe a concession should remain must explain why it should not be withdrawn or suggest legislative amendments.
Wider Impact
However, reports on MyBroadband, stated that customs experts have flagged the negative impact on industries ranging from e-commerce to wine.
For example, SARS will no longer allow wine producers in the Cape to clear goods up to 14 days after leaving port.
How will the changes to customs affect your shopping experience with Shein and Temu?
Let us know by leaving a comment below, or send a WhatsApp to 060 011 021 1
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