SARS Eyes Import Tax Reform, Threatening Shein and Temu’s Low Prices

South African shoppers may soon see higher prices on Temu and Shein as the South African Revenue Service (SARS) moves to end import tax concessions that have long benefited these Chinese e-commerce giants.

Currently, imports valued under R500 enjoy a flat 20% duty rate without the additional 15% VAT, a rule introduced in 2007 to simplify customs clearance for low-value shipments. This system has allowed platforms like Temu and Shein to sell at highly competitive prices by shipping items in smaller consignments that stay below the tax threshold.

Local Businesses Demand a Level Playing Field

While this model has benefited consumers, South African retailers argue it has led to unfair competition. Local businesses importing clothing face a 45% duty plus VAT, significantly increasing their costs compared to international e-commerce platforms.

SARS Commissioner Edward Kieswetter has responded by issuing a notice of intention to withdraw these customs concessions. If approved, this move would eliminate the simplified clearance process and remove the tax advantages that have helped Shein and Temu keep prices low.

What This Means for Consumers

For now, the decision remains under review, with discussions ongoing between SARS, e-commerce stakeholders, and retail industry players. However, if implemented, South Africans could see a noticeable rise in prices on their favourite online shopping platforms.

While the policy shift is aimed at protecting local businesses, it may also reshape the affordability of fast fashion and other low-cost imports in South Africa.