- Calls for Official Accountability: ActionSA is demanding the immediate appearance of key government officials before Parliament to explain the delays in closing a significant tax loophole exploited by Chinese online retailers Shein and Temu.
- Economic Impact of the Tax Loophole: The loophole cost South Africa over 8,000 potential jobs and at least R1 billion in lost sales, with large companies splitting orders to avoid higher duties and VAT.
- Market Penetration by Shein and Temu: Between 2020 and 2024, these companies generated R7.3 billion in sales, capturing a notable share of the online retail market and significantly impacting local manufacturers.
ActionSA has called for the immediate appearance of Trade, Industry and Competition Minister Parks Tau, Finance Minister Enoch Godongwana, and SARS Commissioner Edward Kieswetter before Parliament to explain delays in closing a tax loophole exploited by Chinese online retailers Shein and Temu between 2020 and 2024.
A report by the Localisation Support Fund estimates the loophole cost South Africa over 8,000 potential jobs and at least R1 billion in lost sales. Under the “de minimis” rule, parcels valued under R500 were charged a flat 20% duty and no VAT. Shein and Temu allegedly split large orders into multiple low-value parcels to take advantage of this, while local retailers paid up to 45% duty and 15% VAT.
Between 2020 and 2024, the two companies reportedly generated R7.3 billion in sales, capturing 3.6% of the retail clothing, textile, footwear, and leather market, and 37% of online sales. Local producers lost an estimated R960 million in manufacturing sales, with 2,818 manufacturing and 5,282 retail jobs never materialising.
Although SARS and the DTIC eventually closed the loophole in late 2024, ActionSA says the damage was already done. The party insists that Parliament hold the responsible officials accountable and ensure similar economic harm is prevented in the future.
