SARS incurred R3.5 billion losses from online retailers Shein, Temu

The South African Revenue Service (SARS) says it’s closely monitoring Chinese online retailers Shein and Temu. This after it emerged that they have been using tax loopholes to undercut South African competitors.

Shein and Temu are accused of abusing the rule of getting clothing parcels under R500 through customs with a 20% import duty and no value-added tax.SARS Commissioner Edward Kieswetter says they have incurred losses amounting to about R3.5 billion.

XA Global Trade Advisors’ CEO Donald MacKay says, “I think it’s reasonable and people are unhappy with it, but there was a special concession given a couple of years ago on small parcels entering by courier to just allow them to clear through a little bit faster, so they would apply a flat 20% duty, not considering what was inside, so if the product was duty-free, it would pay 20%, but if it was clothing, it will also pay 20 and not 45%. We have all seen the volume increase out of Shein and Temu and that is why they are doing it and I think it’s fair enough.”

Story credit: SABC News