Import duties on Chinese tyres in South Africa now over 60%

The International Trade Administration Commission (ITAC) last week announced the imposition of a new 38.33% provisional duty on tyres imported from China to South Africa which has pushed the overall duties on these tyres close to the 70% mark, said the Tyre Importer’s Association of South Africa (TIASA).

Provisional payments are lodged to secure revenue (duties, levies, and VAT) which is due or may become due to SARS Customs pending compliance with a provisional payment condition, according to the South African Revenue Services.

These provisional duties are in addition to the existing taxes of between 25-30% and are effective immediately.

Provisional duties

The imposition of provisional duties comes after the South African Tyre Manufacturers Conference (SATMC) applied to the ITAC in January to investigate the practice of tyres being imported from China at “unfairly low prices” and causing material damage to the local manufacturing industry, said the organisation.

Following a preliminary investigation, the ITAC decided to impose the provisional duties for a period of 6 months starting 9 September 2022 to 8 March 2023.

However, this means that average tyre prices in South Africa are now expected to rise significantly, said TIASA.

“Taxi operators will now pay 23% more for tyres, truck and logistics providers 22% more – higher than applied for – and passenger vehicle owners will now have to outlay between 21 – 25% more for tyres,” said Charl de Villiers, TIASA Chairperson.

Tyres are the third-biggest expense for fleet operators following wages and fuel, and the increase in tyre prices could therefore have a knock-on effect on the prices of goods and food, said De Villiers.

Similarly, motorists may now delay replacing worn tyres or trade down to illegally regrooved tyres, which impacts their safety on the roads.

TIASA is calling on the government to reverse these duties immediately as it argues they will “push many of these companies out of business, destroy jobs, and add an excruciating financial burden on every motorist in the country, every bus company, every taxi owner and every commuter.”

ITAC investigation

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

The ITAC will soon publish 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.

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 31 July 2023.