ActionSA has formally requested the urgent appearance of the Minister of Trade, Industry and Competition, Parks Tau, the Minister of Finance, Enoch Godongwana, and the SARS Commissioner, Edward Kieswetter, before Parliament to account for the delay in closing a tax loophole exploited by Chinese online retailers Shein and Temu between 2020 and 2024.
This delay in addressing the abuse of South Africa’s import regime has reportedly cost the local economy over 8,000 jobs and at least R1 billion in lost sales, according to a new report commissioned by the Localisation Support Fund.
Between 2020 and 2024, Shein and Temu made use of the “de minimis” rule, which allowed parcels valued under R500 to enter the country with a flat 20% customs duty and no VAT. These companies deliberately broke up large orders into multiple low-value parcels to benefit from this rule, while local retailers and importers were paying up to 45% duty and 15% VAT on similar goods. For four years, government allowed this practice to continue while local manufacturers and retailers bore the consequences.
The Localisation Support Fund’s report finds that Shein and Temu generated R7.3 billion in sales over this period, capturing 3.6% of South Africa’s retail clothing, textile, footwear and leather market, and 37% of the sector’s online sales. In contrast, local producers lost an estimated R960 million in manufacturing sales. The loophole contributed to an estimated 2,818 manufacturing and 5,282 retail jobs that never materialised – over 8,000 potential local jobs in total.
While SARS and the DTIC eventually moved to close the loophole in late 2024, the damage had already been done. The responsible officials must now account for their inaction and explain what steps will be taken to prevent a recurrence. ActionSA will write to the Parliamentary Portfolio Committees on Finance and Trade & Industry to request urgent hearings on this matter.
President Ramaphosa’s recent statement that South Africa’s economy is in a “state of emergency” is a late and insufficient recognition of what ordinary South Africans have known and felt for years. The destruction of local industries by unfair foreign competition, aided by slow and ineffectual governance, is just one example of how this emergency was created by those now claiming to want to solve it.
South Africa’s economy has not grown by 3% or more in over a decade. Under the Government of National Unity, growth is yet to exceed 1%, and unemployment continues to rise. Every day, thousands of South Africans lose jobs while Cabinet grows and executive perks multiply.
This is not simply about Shein and Temu. It is about an economic policy environment that is failing to protect local businesses, workers, and consumers. The Ministers and the SARS Commissioner must be held accountable for this failure, and Parliament must do its duty to ensure that it never happens again.
ActionSA Demands Accountability for 8,000 Jobs Lost and R1 Billion in Lost Sales Due to Shein and Temu Tax Loophole
ActionSA has formally requested the urgent appearance of the Minister of Trade, Industry and Competition, Parks Tau, the Minister of Finance, Enoch Godongwana, and the SARS Commissioner, Edward Kieswetter, before Parliament to account for the delay in closing a tax loophole exploited by Chinese online retailers Shein and Temu between 2020 and 2024.
This delay in addressing the abuse of South Africa’s import regime has reportedly cost the local economy over 8,000 jobs and at least R1 billion in lost sales, according to a new report commissioned by the Localisation Support Fund.
Between 2020 and 2024, Shein and Temu made use of the “de minimis” rule, which allowed parcels valued under R500 to enter the country with a flat 20% customs duty and no VAT. These companies deliberately broke up large orders into multiple low-value parcels to benefit from this rule, while local retailers and importers were paying up to 45% duty and 15% VAT on similar goods. For four years, government allowed this practice to continue while local manufacturers and retailers bore the consequences.
The Localisation Support Fund’s report finds that Shein and Temu generated R7.3 billion in sales over this period, capturing 3.6% of South Africa’s retail clothing, textile, footwear and leather market, and 37% of the sector’s online sales. In contrast, local producers lost an estimated R960 million in manufacturing sales. The loophole contributed to an estimated 2,818 manufacturing and 5,282 retail jobs that never materialised – over 8,000 potential local jobs in total.
While SARS and the DTIC eventually moved to close the loophole in late 2024, the damage had already been done. The responsible officials must now account for their inaction and explain what steps will be taken to prevent a recurrence. ActionSA will write to the Parliamentary Portfolio Committees on Finance and Trade & Industry to request urgent hearings on this matter.
President Ramaphosa’s recent statement that South Africa’s economy is in a “state of emergency” is a late and insufficient recognition of what ordinary South Africans have known and felt for years. The destruction of local industries by unfair foreign competition, aided by slow and ineffectual governance, is just one example of how this emergency was created by those now claiming to want to solve it.
South Africa’s economy has not grown by 3% or more in over a decade. Under the Government of National Unity, growth is yet to exceed 1%, and unemployment continues to rise. Every day, thousands of South Africans lose jobs while Cabinet grows and executive perks multiply.
This is not simply about Shein and Temu. It is about an economic policy environment that is failing to protect local businesses, workers, and consumers. The Ministers and the SARS Commissioner must be held accountable for this failure, and Parliament must do its duty to ensure that it never happens again.