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Businesses fuming over 'unilateral' duties hike

Apr 12 2018 17:39
Khulekani Magubane

Cape Town – A duties increase on trade goods signed off under former minister of finance Malusi Gigaba has captains of local industry seeing red over the costs it will add to their business operations.

The business community claims that the South African Revenue Service (SARS) and National Treasury introduced a 10% increase in the import tariff on components of ready-made blinds without warning or consultation. However, Treasury said the hike was in line with multilateral trade agreements.

A customs and excise schedule, which Fin24 has seen, reflects that Gigaba signed off on tariffs for three categories of items; namely parts of a maximum outside cross-sectional dimension not exceeding 370mm, bars and rods of a maximum cross-sectional dimension exceeding 7.5mm, but not exceeding 160mm, as well as profiles of a maximum cross-sectional dimension not exceeding 370mm.

It must also be noted, however, that the schedule reflects the above mentioned items are duty-free under the Southern African Development Community, the European Union and the European Free Trade Association.

CEO of Focus Blinds and Shutters Neville Aronowitz told Fin24 that SARS' introduction of an import tariff increase on ready-made blinds along with a duties increase in components imported by South African manufacturers for local production, was “regrettable”.

“This essentially means that we are subsidising Chinese slave labour on the one hand with cheap import duties on ready-made blinds, while making it more difficult for local manufacturers of blinds to compete with these cheap imports, by penalising them with higher import duties on the components that these South African manufacturers require to manufacture the goods locally,” said Aronowitz.

Aronowitz said the additional duty imposed on South African manufacturers was sometimes as much as 20%, which was higher than the equivalent duty imposed on completed Chinese imports. 

“Apart from the increases in taxes [announced] in the budget and we hear about through the media, there are a number of increases in taxes that are discreetly or indiscreetly added to the tax base without the knowledge of the public. These very reckless taxes being imposed on the South African manufacturer are making it more difficult to compete with imports from China,” he said.

Aronowitz added that attempts to get hold of the relevant officials proved unsuccessful.

National Treasury told Fin24 that the tariff amendments emanated from inputs from the International Trade Administration Commission of South Africa.

“The amendments to the tariff schedule were done as per the recommendations of the ITAC, which is responsible for customs tariff investigations; trade remedies; and import and export control.

“The Minister of Finance gave effect to a request from the Minister of Trade and Industry in terms of section 48(1) of the Customs and Excise Act, 1964 but the trade policy decision was made by ITAC,” the National Treasury said in a statement to Fin24.


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national treasury  |  sars  |  tariff hikes
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