Customs Tariff

South Africa is a contracting party to the General Agreement on Tariffs and Trade (GATT) and is a member of the World Trade Organisation (WTO). The framework of the external tariff is the 2-column Harmonised Commodity Coding and Description System (HS).

The Southern African Customs Union (SACU) is a customs union agreement that is in force between South Africa, Botswana, Lesotho, Namibia and Swaziland. In terms of the agreement, goods are traded free of duty between members of the customs union.

Import tariffs are levied at the first point of entry in the South African Customs Union.

Tariff reductions:

Under her market access offer for the Uruguay Round, South Africa will:

  • rationalise 10 000 tariff lines down to between 5 000 and 6 000 by the end of the five-year adjustment period following 1995;
  • bind 98 per cent of its tariff lines over that period, well up from the 55 per cent bindings prior to the offer;
  • replace all remaining quantitative controls and formula duties with ad valorem duties; and
  • cut back tariff lines from the 80 different levels of the past into six levels: 0 per cent, 5 per cent, 10 per cent, 15 per cent, 20 per cent and 30 per cent.

Protection for two industries will be phased down over a longer period: clothing and textiles will comply with the GATT schedules over 12 years and maximum tariffs will fall to 45 per cent, instead of 30 per cent. Motor industry manufacturers have a maximum of eight years to adjust and will have to reach a terminal maximum tariff of no more than 50 per cent.

For more information on import policy and tariffs, contact:

Board on Tariffs and Trade
Private Bag x753
Pretoria, 0001
Telephone: (27 12) 322-8244
Fax: (27 12) 322-0149

Protection levels:

Many goods, especially industrial inputs, enter duty free. Where duties apply, the rates generally fall between five and 25 per cent, although protection can be quite high, with automobile tariffs at 50% per cent. Goods not exceeding a value of R400 are not liable for customs duty and do not have to be entered on a bill of entry.

As noted earlier, the government is now in the process of simplifying the tariff system by consolidating categories of similar goods and reducing many tariff levels. The move to simplify the tariff system by reducing the number of separate tariff items has met with limited success in reducing tariff barriers: some tariffs have been reduced, others, due to the combining of formerly separate listings, have actually risen.

Any South African producer may petition the Board of Tariffs and Trade for tariff protection. In practice, approval of such petitions is more likely in cases where the producer has a major share of the domestic market and can show that foreign competition is eroding the producer’s market dominance. In mid- 1991, the Government introduced a new three-week public comment period followed by an undefined period for governmental decision-making.

Excise duties

Specific excise duties are levied for revenue purposes on luxury goods: spirits, beer, cigarettes/tobacco and new cars. In effect, local and imported items are treated equally.

Value for duty

The dutiable value of goods imported into South Africa and the Southern African Customs Union (SACU) is calculated on the f.o.b. price in the country of export.

Section 66 of the South African Customs and Excise Act implements the GATT Customs Valuation Code and states that the value for customs duty purposes is the transaction value, the price actually paid or payable. In cases where the transaction value cannot be ascertained, the price actually paid for similar goods, adjusted for differences in cost and charges based on distance and mode of transport, is regarded as the transaction value. If more than one transaction value is ascertained, the lowest value applies. Alternatively, a computed value may be used based on production costs of the imported goods.

In the case of related buyers and sellers, the transaction value will be accepted if, in the opinion of the Commissioner for Customs and Excise, the relationship does not influence the price, or if the importer shows that the transaction value approximates to the value of identical or similar goods imported at or about the same time.

Dutiable weight for the assessment of specific duties is the legal weight of the merchandise, plus the weight of the immediate container in which the product is sold, unless specified otherwise in the tariff.

Preferential Access

Trade Blocs

Southern African Customs Union (SACU): Southern African Customs Union is composed of South Africa, Botswana, Lesotho, Namibia and Swaziland. In terms of the agreement, members use the South African tariff as a common external tariff and goods are traded free of duties and quotas between member states.

Southern African Development Community (SADC): South Africa joined SADC in August 1994. The other members of SADC are: Angola, Botswana, Democratic Republic of the Congo, Lesotho, Malawi, Mauritius, Mozambique, Namibia, Seychelles, Swaziland, Tanzania, Zambia, Zimbabwe. SADC’s objectives are that member states work together to reconstruct and develop the entire social and economic framework of the region so that the region can develop and offer its peoples economic well being, social stability and lasting peace. The SADC treaty places binding obligations on member countries with the aim of promoting economic integration towards a fully developed common market.

SADC committed itself to the creation of a free trade area (FTA) when a Protocol on Trade was signed at the SADC Summit in 1996. The essential ingredients of the trade protocol are: an eight year timetable for the implementation of a FTA; classification of products covered by and excluded from the protocol based on level of sensitivity; elimination of export duties, non-tariff barriers and qualitative export restrictions; and rules of origin for community treatment. The agreement will be in full compliance with WTO rules whereby it will cover “substantially all trade” without the exclusion of any sector.

It is hoped that an interim agreement will be in place by January 2000 with the full agreement in place by 2010. The initial agreement will exclude the Democratic Republic of Congo, Angola and the Seychelles. It is envisaged that they will join at a later stage. The remaining eleven SADC members have now tabled either preliminary or opening offers with Mozambique and Tanzania having tabled draft offers.

South Africa, in recognition of her large trade surplus with the region, has submitted an offer based on the principle of asymmetry whereby South Africa will scale down tariffs over a five-year period, faster than the other four members of the customs union. They will scale down tariffs over a seven-year period.

Bilateral trade agreements

Malawi: An agreement between the South Africa and Malawi was reached in 1967 and provided for preferential rates of duty, rebates and regulations on certain goods traded between the two countries. The agreement has been amended and all goods of Malawian origin enter South Africa duty-free. South African goods entering Malawi receive the most-favoured-nation rate of duty.

Zimbabwe: An agreement between South Africa and Zimbabwe (1964) providing for preferential rates of duty, rebates and quotas on certain goods traded between the two countries has been under review for some time by both parties. Consensus on a new trade agreement was reached in August 1996. In terms of the new agreement, tariffs and quota levels on textile imports into South Africa will be lowered. There is a possibility that the agreement will be extended to other sectors such as the agricultural sector.

Mozambique: This agreement is a wide-ranging preferential arrangement regulating mine labour, railway and port matters, and trade. A limited number of Mozambican goods receive tariff preference from South Africa.

European Union: The European Union and South Africa signed a Free Trade Agreement (FTA) on the 11th of October 1999 following four years of negotiation. The agreement will be phased in over a ten to twelve year period and will essentially liberalise 86% of South Africa’s imports from the EU and about 95% of EU imports from South Africa. The overall agreement meets WTO requirements of 90% coverage. The agreement is due to come into force on 1 January 2000 however, recent developments involving a dispute over South Africa’s usage of certain terms relating to their wines and spirits may cause a delay in implementation.

Shaun Bakamoso

Greetings. I'm Shaun Bakamoso, and I'm thrilled to be your guide through the dynamic world of business news in South Africa here at mbendi.co.za. With a passion for staying informed and a keen interest in the ever-evolving landscape of business, I've dedicated myself to providing you with timely, insightful, and comprehensive coverage of the latest developments impacting the South African economy. bakamoso@gmail.com / Instagram