There’s no doubt you’ve heard about, or felt the pinch of, increased custom duties on imported clothes from international retailers in recent months. Christi Nortier breaks it down, so you know what you’re paying for and why
The old status quo
It’s never been easier to shop for clothing online, and for some importers, it was perhaps a little too easy to sell it – at least, that’s from the perspective of the South African Revenue Services (SARS) and local retailers.
You see, before 1 November 2024, imported clothing packages under R500 were coming into the country with a flat rate of 20% customs duty and no import tax. If the clothing package was over R500, it would be slapped with a 45% custom duty and 15% import VAT. It made a pricey parcel even more expensive.
And some importers took note of this. Large international e-commerce companies, such as Shein and Temu, took advantage of this loophole by breaking up packages into bundles of R500 or less. So not only were South Africans buying cheap imports, but the tax added was minimal. A win for the individual consumer perhaps, but not for our clothing manufacturing and retail industry, argues SARS.
This system left local retailers on the back foot, SARS says, since they didn’t have the means to import in such small quantities – and also evade the higher tax. This made it harder for locally produced fashion to remain competitive. With clothing imports from China alone valued at R4.2 million a month in 2024, the revenue service decided it was time to intervene and make importing frequent, low-cost imports less attractive to consumers.
The new status quo
From 1 November 2024, the concession for clothing parcels under R500 was scrapped. In alignment with the World Customs Organisation framework, these packages would also be subject to the 45% custom duty and 15% import VAT.
A custom duty is calculated based on the declared value of the package, which includes aspects such as shipping and insurance. Import VAT is calculated after the custom duty is added to the total value of the goods, plus a 10% fee if there is no shipping or insurance cost added.
Ready for check out
So what does this mean for your cart? An order of R400 that would have once cost you R480 with the flat rate of 20% will now cost you R667 after the custom duty and import VAT is added – that’s a difference of R187, in case you were wondering. Beyond the monetary value, there’s also the issue of the online marketplaces’ quality, and ease of returns and refunds, to consider as a consumer. It’s no secret that low-value imports often become the butt of the joke when it comes to these departments! It’s also widely reported that these online marketplaces rely on unfair labour practices and wasteful manufacturing to get prices so low.
As ever, South African consumers are stuck between a rock and a hard place, but the power of their purchase remains in their hands, so support local if you can!
By: Christi Nortier
Text courtesy of Balanced Life magazine
Photography by: Pexels
