Call to reverse higher tyre import taxes in South Africa

Following the recent imposition of provisional higher excise duties of 38.33% on tyres imported to South Africa from China, these products will now be taxed at rates of between 63.33-68.33%.

“[This] is a major blow to road safety in the country and should be reversed immediately,” the Automobile Association (AA) calls on the government.

The AA expects already financially-strained motorists will be unable to shoulder the additional increases in tyre prices and will therefore continue using tyres that are in poor condition.

This puts their safety on the road at a much higher risk, as poor-condition tyres were among the main causes of road deaths in 2021.

Higher duties

The higher duties are a result of the South African Tyre Manufacturers Conference (SATMC) which applied to the International Trade Administration Commission (ITAC) to investigate the practice of tyres being imported to the country from China at “unfairly low prices” thereby causing “material damage” to the local manufacturing industry.

While this is one side of the story, the AA also notes that the “problems in the tyre sector [are] a symptom of poor management of SA’s macro-economy.”

“In our view, the issues around tyre pricing are systemic of deeper issues within the management of the country’s economy and consumers are now, again, being asked to carry the burden,” said the AA.

Regardless of the reason for the higher duties, the association said that local consumers will ultimately bear the brunt of the final decision.

“Those with private transport will now have to pay more for tyres – essential safety equipment on vehicles – something we don’t believe will happen,” said the Association.

“Public transport providers such as busses and taxis will either not pay the new prices or merely pass the increases to their passengers. Both options are unacceptable.”

The AA is throwing its weight behind organisations such as the Tyre Importers Association of South Africa (TIASA), which argues that the SATMC members import roughly 80% of their product catalogues making the application to increase import duties on Chinese tyres questionable.

“The increased prices of tyres are, simply put, going to create major road safety problems in the future,” said the AA.

“Government should immediately reverse the introduction of the additional excise duties, and find a better, more long-lasting solution to the problem in the tyre sector that doesn’t impact negatively on consumers.”

ITAC investigation

The ITAC investigation was initiated on 31 January 2022 and is still ongoing.

The ITAC has published a preliminary report on its decision to impose provisional duties on Chinese tyres imported to South Africa, which will be open for comment for 14 days from the date of publication.

Thereafter the investigation will continue with the final phase where the ITAC will study all interested parties’ comments and verify information that was submitted, before issuing an essential facts letter.

This will be followed by the final determination that must be published by or before 31 July 2023.