Includes information on average tariff rates and types that U.S. firms should be aware of when exporting to the market.
South Africa applies Most Favored Nation (MFN) rates to imports from the rest of the world, as well as preferential rates applied to products originating from trade partners with which it has negotiated trade agreements. South Africa has an Economic Partnership Agreement (EPA) with the European Union. It has an EPA with the United Kingdom. South Africa is also a member of the newly launched African Continental Free Trade Agreement as well as the Southern African Customs Union.
(SACU – https://www.sacu.int/): comprises South Africa, Botswana, Lesotho, eSwatini (formerly Swaziland) and Namibia and administers a common external tariff for third parties. SACU member states also apply identical excise duties and ad valorem customs duties as reflected in the relevant schedules of the respective member States Customs and Excise Acts. In support of this, member States also do not have rules of origin on trade among themselves. This common external tariff and excise regime is a cornerstone of the customs union and SACU’s relationship with third parties. The SACU regime requires review, with the arrangement having often been described as complicated and haphazard.
ITAC (http://www.itac.org.za/) is responsible for tariff investigations, amendments, and trade remedies in South Africa and on behalf of SACU. Tariff rates are detailed on the South African Revenue Service side at SARS Home | South African Revenue Service / and are part of the Southern African Customs Union arrangement.
South Africa reformed and simplified its tariff structure in 1994. Tariff rates have been reduced from a simple average of more than 20 percent to an average of 7.1 percent in 2020. Notwithstanding these reforms, importers have complained that the tariff schedule remains unduly complex, with nearly forty different rates. Tariff rates mostly fall within eight levels ranging from 0 to 30 percent, but some are higher (e.g., most apparel items). Nearly all South Africa’s specific and composite duties were converted to ad valorem rates (a tax, duty, or fee which varies based on the value of the products, services, or property on which it is levied), with a few exceptions remaining in a limited number of sectors, including textile and apparel products. The end rate for apparel is 40 percent, yarns 15 percent; fabrics 22 percent; finished goods 30 percent; and fibers, 7.5 percent. Import duties on vehicles and automotive components will remain at 25 percent on light vehicles and 20 percent on original equipment components through 2035.
The dutiable value of goods imported into South Africa is calculated on the f.o.b. (free on board) price in the country of export, in accordance with the WTO (ex-GATT) Customs Valuation Code. The value for customs duty purposes is the transaction value, or the price paid or payable.
In cases where the transaction value cannot be determined, the price paid for similar goods, adjusted for differences in cost and charges based on distance and mode of transport, is regarded as the transaction value. If more than one transaction value is determined, the lowest value applies. Alternatively, a computed value may be used based on production costs of the imported goods. In the case of related buyers and sellers, the transaction value will be accepted if, in the opinion of the Commissioner for Customs, the relationship does not influence the price, or if the importer shows that the transaction value approximates the value of identical or similar goods imported at or about the same time.
Dutiable weight for the assessment of specific duties is the legal weight of merchandise, plus the weight of the immediate container in which the product is sold, unless specified otherwise in the tariff.
The value-added tax (VAT) is 15 percent. VAT is payable on nearly all imports. However, goods imported for use in manufacturing or resale by registered trades may be exempt from VAT.
Specific excise duties are levied on tobacco, tobacco products, and petroleum products. Duties on alcoholic beverages are set at fixed percentages of the retail prices. Ad valorem excise duties are levied on a range of “up market” consumer goods. The statutory rate is currently 10 percent (except for most office machinery, as well as motorcycles, that attract duty of 5 percent).
Various provisions for rebate of duty exist for specific materials used in domestic manufacturing. The importer must consult the relevant schedules to the Customs and Excise Act to determine whether the potential imports are eligible for rebate duty. Information can be found on the International Trade Administration Commission (ITAC) of South Africa’s website at: http://www.itac.org.za