The government is considering scrapping the VAT exemption on low-value imported goods, a move that could affect thousands of online shoppers who purchase from platforms such as Shein and Temu.
This proposal is included in the 2025 Draft Taxation Laws Amendment Bill (TLAB), recently published by the National Treasury and the South African Revenue Service (SARS) for public comment.
If approved, all goods entering South Africa, regardless of their value, would be subject to the standard 15% Value-Added Tax (VAT). Currently, items valued below R500 are exempt from VAT and only attract a flat 20% customs duty.
The draft bill aims to eliminate the tax-free threshold on imported goods, meaning even low-value online purchases will now incur VAT.
Concerns over the impact of foreign e-commerce retailers on the local economy have grown in recent years.
A report by the Localisation Support Fund (LSF) found that platforms such as Shein and Temu may have contributed to the loss of over 8,000 potential jobs in South Africa between 2020 and 2024.
The study focused on the effect of international online retailers on the country’s clothing, textile, footwear, and leather (R-CTFL) sector.
The proposed changes are part of ongoing efforts to support local industry while generating additional tax revenue. Public consultation on the bill is currently open.
Facebook Comments