For the first time since a report investigating South Africa’s import duties was launched, the report has recorded an improved performance, XA Global Trade Advisors (Xagta) has said.
Xagta CEO, Donald MacKay, said one of the highlights of the latest Import Duty Investigations Report, now in its fifth iteration, was that 14 investigations had been completed in the last six months.
“The last time we saw anything like this was in 2017, so the sense of urgency is welcomed,” he said.
Importantly, the report has confirmed that “duties are still way too sticky as 93% of all tariff codes which attract a duty, last had their duty levels reviewed more than 20 years ago”.
“This is not good, but presents a wonderful opportunity to make a big difference quickly.”
MacKay said he was not sure whether the duties should still be in place, and neither did anyone else to his recollection.
“The only way to resolve this is to begin methodically reviewing the tariff codes which have these long-running duties. ITAC (International Trade Administration Commission of South Africa) knows this is important, which is why they normally publish a period – usually three years – within which the duty levels should be reviewed.”
MacKay said it was unfortunate that these reviews almost never happened.
For the period July 2023 to June this year, the report found that R87 billion had been paid in import duties.
“Of this, R81 million was paid on products which have not been reviewed in more than 20 years. This is where the lotto magic can happen.”
Also, the report found that “the private sector is starting to use the tariff instruments more again”.
“This is probably the most significant finding of all. In the prior six months, this had fallen to a 20-year low of only two applications.
“This rose to six applications in the most recent period. If these levels of participation are coupled with fast decisions, as happened in the past, our trade policies will begin having a greater positive effect on the economy.
“What we want is predictable processes and the signs are good that we are headed in that direction,” MacKay said.
