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S Africa to impose VAT on low-value parcels to protect garment sector

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South Africa will temporarily impose value-added tax on low-value parcels to raise its apparel industry's competitiveness.
The customs department offers a concession for goods valued at below R500, and importers were paying flat 20 per cent customs duties and no VAT.
This will change from September 1 as VAT will be imposed in addition to the import tariff.

South Africa will temporarily impose value-added tax (VAT) on low-value parcels to raise the competitiveness of its apparel industry and promote legitimate trade for economic development in the e-commerce era, the South African Revenue Service (SARS) recently announced.

“SARS has noted legitimate concerns about the importation of various goods, particularly garments, via e-commerce. A number of importers have failed to pay the required customs duties and VAT on these imports, resulting in unfair competition with other players in the sector,” a press release by the government organisation said.

South Africa will temporarily impose value-added tax on low-value parcels to raise its apparel industry's competitiveness. The customs department offers a concession for goods valued at below R500, and importers were paying flat 20 per cent customs duties and no VAT. This will change from September 1 as VAT will be imposed in addition to the import tariff.

Due to an immense rise in e-commerce, SARS Customs implemented a concession for goods valued at less than R500. Importers were paying a flat rate of 20 per cent in lieu of customs duties and no VAT.

This will change from September 1 as the country will impose VAT in addition to the import tariff as an immediate interim measure.

The measure is in line with the World Customs Organisation (WCO) framework, SARS said in a release.

SARS commissioner Edward Kieswetter said his organisation will resort to more use of data, artificial intelligence, machine learning and algorithms to better facilitate trade while minimising risks to the economy.

SBS Zipper News Desk (DS)

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