SARS claims that clothing stores are skirting or evading the new tax hikes in South Africa. The South African Revenue Service authorities explained how these fashion brands are possibly avoiding the new import tax rates.
SARS Claims Clothing Stores Evade Tax Hikes in South Africa
According to SABC News, SARS said that it's aware that numerous offshore clothing brands have been avoiding the import duty of 45% plus 15% VAT (value-added tax).
SARS officials said that these online offshore firms have been evading the new import tax rules by exporting small parcels to the country. They deem these items to be less than R500 (around $26).
By doing this, they will only be charged an import duty of 20% and zero VAT. The National Clothing Retail Federation explained that offshore online merchants are getting an unfair advantage in the local market, which negatively affects local clothing manufacturers.
South Africa's New Import Tax Rates
My Broadband reported that SARS has committed to tax all clothing items, such as those from Shein, with an import of 45% plus value-added tax. This adjustment was implemented on July 1. Many people were in favor of the new import tax rates.
Among them is Foshini Group CEO Anthony Thunstrom, who said that SARS' new import tax rates will greatly help the local industry in South Africa. These include local production and jobs.
However, since some clothing stores are evading the new import tax, SARS urged courier companies to properly observe the law in its declarations with the South African Revenue Service.
The tax collection authority added that this is a must since there have been tendencies to under-declare products being brought within the country.
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