SOUTH AFRICA: Footwear Tariff Proposals Create Unease
According to a notice published in the Government Gazette at the end of September, the forum has applied for an increase of tariffs on footwear with outer soles and uppers of rubber or plastics from 35 per cent or 30 per cent ad valorem or R5 per pair to 35 per cent or 30 per cent or R12.60 per pair. They are requesting similar increases on footwear with outer soles of rubber, plastics, leather or composition leather and uppers of textiles materials.
Although no official comment has been forthcoming from the Department of Trade and Industry (DTI), the notice states that the Board of Tariffs and Trade will investigate the application before recommending any action.
Reacting to the application, Krish Chetty, managing director of the Skye Group of Companies and importers of brands such as Converse, All Star, Saucony and Mille to South Africa, said: "Many legitimate tax paying importers who also create and employ a large workforce both directly and indirectly will be forced to scale their businesses down and even be faced with possible closure."
He added that further protection would only serve to weaken the competitiveness of the South African footwear industry and create further factory closures and unemployment.
Ostensibly aimed at curbing the already high incidence of illegal imports and dumping in South Africa, Chetty believes that the increased duties will only serve to further organised crime and corrupt syndicates. "Illegal importers of footwear will expand their network and infrastructure and will continue to bring footwear into this country illegally by round-tripping currency and playing games with the invoicing," he said, adding that this could have no benefit to revenue or to the local footwear industry.
Looking ahead, Chetty said that the import duty should remain at 30 per cent across all footwear as was intended by the DTI and their GATT arrangement during the six year, five per cent duty phase down period. He said that better policing and control of all footwear imports and containers was needed at the points of entry to South Africa, and that stricter control of import documents by customs/DTI would ensure that the correct duties are paid on all footwear imports.
Pointing by way of example to the clothing and textile industries in South Africa, he highlighted their emphasis on proactively developing the necessary resources to benefit from the African Growth and Opportunity Act (AGOA). Citing America as one of the largest importers of footwear, he added that South African manufacturers should lobby through the American Chamber Of Commerce for a special arrangement of footwear exports to the USA duty free under the recent AGOA agreement.
By Colleen Jacka
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