Taxing times for Shein and Temu shoppers
Shop 'til you drop, but know your taxes! Confused about the tax rules on your favourite online shopping sites? We've got the scoop…
The South African Revenue Service (Sars) has not been quite vocal about its customs import system changes, leaving online shoppers in the dark about taxes on international imports.
Now, reports have surfaced about Sars cracking down on Shein and Temu's alleged tax evasion practices.
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In the past, Chinese retailers allegedly split items into separate consignments to avoid import taxes. However, South Africa's de minimis value was set at R0, meaning all imported items were subject to taxes.
A source revealed to MyBroadband that Shein and Temu used a Sars concession for imports below R500, which allowed logistics companies to pay a flat 20% duty rate with no VAT. This concession was implemented in 2007 to speed up customs clearance processes.
In response to complaints from local retailers, Sars announced plans to levy a 45% tax on clothing items under R500. However, this plan was put on hold, and instead, Sars started levying 15% VAT on imports under R500.
Sars also reconfigured the 20% flat rate for low-value orders into the World Customs Organisation (WCO) framework. The WCO guidelines categorise imported goods into four broadband categories, determining duties and taxes.
Despite these changes, Sars has not published its specified de minimis and full declaration values, leaving online shoppers uncertain about taxes on their orders. MyBroadband assembled several orders from Shein and Temu customers and found varying tax rates.
To stay informed about taxes on your online shopping, keep an eye on Sars' updates and announcements.
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