Chinese retail giant probed over tax violations concern
Government is investigating Chinese fast-fashion retailer Shein over concerns that it may be exploiting tax loopholes to undercut local retailers and manufacturers.
Shein, meanwhile, says it is committed to ethical business and wage practices as well as abiding by the laws and regulations, but there are concerns in some quarters about the rapid gains it is making the SA market, Fin24 reports.
Founded in 2008, Shein is a Chinese online retailer that ships to more than 150 countries. It markets its clothes primarily via social media, and has gained a fast-growing market in SA.
The Southern African Clothing and Textile Workers Union (Sactwu) and the National Clothing Retail Federation (NCRF) is concerned it may be exploiting tax loopholes to bring in goods far more cheaply than other international players and local companies.
They also believe the Chinese retailer could be undermining both the manufacturing and retail aspects of the Retail-Clothing, Textile, Footwear, Leather Master Plan which the government and local clothing sector agreed on in 2019 to try to encourage more local content and jobs.
Sactwu's national industrial policy officer, Etienne Vlok, said the union and the NCRF, which represents top retailers such as Foschini owner TFG, Truworths, Woolworths, Mr Price, Pick n Pay Clothing, Queenspark, Cape Union Mart, the LA Group, Cotton On and Retailability, had raised their concerns with the Department of Trade, Industry & Competition (DTIC).
The DTIC confirmed that its investigation on Shein is progressing in partnership with organised business and labour.
Vlok said the model Shein used appeared to be based on avoiding or paying reduced import duties, ‘exploiting the ecommerce loopholes’.
Article disclaimer: While we have made every effort to ensure the accuracy of this article, it is not intended to provide final legal advice as facts and situations will differ from case to case, and therefore specific legal advice should be sought with a lawyer.
