Thousands of people have signed a petition opposing SARS’ decision to close a loophole in the tariff on clothes imported from cheap clothing merchants like Shein and Temu, GroundUp says.

Before November, importers had to pay a 45% tariff on clothes that cost more than R500, in addition to VAT.

But for goods valued at less than R500 there was a concession that allowed importers to pay a flat rate of 20% instead of the tariff, and no VAT.

This meant that exporters could stagger their orders and move smaller parcels valued below R500 to escape the 45% duty and VAT.

But now SARS has made an amendment and imports under R500 are also subject to the 45% tariff and VAT.

Simon Eppel, director of policy and research at Sactwu, said the previous regime allowed retailers like Shein and Temu to undercut local retailers and undermine local factories.

SARS said it had noted ‘legitimate concerns’ about unfair competition.

The Free Market Foundation policy officer Zakhele Mthembu said people who relied on cheap clothing will not be able to afford those products anymore.

‘The government, after being lobbied by local businesses, has the intention of making imports more expensive so that consumers would buy the already expensive clothing sold by SA retailers,’ Mthembu said.

So far more than 24 000 people have signed a petition asking SARS not to go through with the change.

Full GroundUp report