No more freebies? South African government cracks down on Temu

Trade, Industry, and Competition Minister Ebrahim Patel has announced the government’s intention to crack down on international online retailers accused of exploiting tariff loopholes, thereby undermining local businesses. 

This move comes amidst growing concerns regarding the dominance of platforms like Temu and Shein, which allegedly circumvent import duties and taxes, creating an uneven playing field for South African retailers.

Patel emphasized the importance of ensuring fair competition within the online retail space, stating that addressing the emergence of such platforms is critical. 

He stressed the need for all retailers to adhere to regulations and pay full customs duties and VAT to prevent the country from suffering due to regulatory gaps.

Local retailers, including Takealot Group CEO Fred Zietsman, have voiced concerns about the unfair advantage enjoyed by these international platforms. 

Zietsman highlighted that while third-party sellers on platforms like Takealot are obligated to pay import duties and taxes for imported products, some “new players” bypass these regulations, gaining an unfair price advantage.

This situation not only harms local businesses but also deprives the government of much-needed revenue. 

Unpaid taxes and duties have a significant impact on the country’s fiscal health and hinder its ability to invest in essential public services.

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