South Africa will impose value-added tax (VAT) on low-value parcels starting September 1 to bolster its apparel industry and ensure fair trade in the e-commerce sector, the South African Revenue Service (SARS) announced. The move aims to address the issue of unfair competition arising from importers evading customs duties and VAT on goods, particularly garments, imported via e-commerce.
Previously, SARS Customs allowed a concession for goods valued under R500, where importers paid a flat 20% rate without additional VAT. However, with the growing e-commerce market, this has led to concerns over the competitiveness of local businesses.
The new measure, which aligns with the World Customs Organisation (WCO) framework, will require importers to pay VAT in addition to the existing import tariff. SARS commissioner Edward Kieswetter emphasized that the organization will increasingly rely on data, artificial intelligence, machine learning, and algorithms to facilitate trade while safeguarding the economy.
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