The International Trade Administration Commission of SA (Itac) has defended itself against research revealing that import duties paid from July 2023 to June 2024 were applied to tariff codes that have remained unchanged for more than 20 years.
According to a subsequent investigative report conducted by XA Global Trade Advisors (Xagta), 93% of import duties from this period were subjected to these outdated codes.
In a follow-up news report, Itac argued that no trade authority in the world had the capacity to conduct regular reviews.
Xagta chief executive Donald MacKay has since responded to some of the Itac report’s defensive claims:
Itac: No trade authority in the world, even those that have more resources than Itac, could conduct the number of investigations needed to make a meaningful dent in the 3 537 tariff codes that attract duties in South Africa.
Response: They don't have to do everything at once, but not starting means this will never be addressed. A good start would be on the products where they've already identified review dates and then missed them. The full list of these are available for free on our website.
Itac: While the target time frame is six months, various factors — within and outside the control of Itac and applicants — can cause delays. These extensions were not a sign of inefficiency, but rather a result of the complex and resource-intensive nature of the investigations.
Response: This is partly true. The reasons for the delays are not because of complexity or resource intensity because these investigations were fairly consistently being completed within six months for years - until 2019, when things began falling over. If we grant the complexity and resource intensity argument, it still doesn't explain how we go from six months to 27 months - it is not four times more complex. The oldest case ran for over five years. This can't be explained by more complexity.
Itac: On electric vehicle (EV) import duties, Itac said the duties had been put in place to safeguard the domestic automotive industry — especially local manufacturers of internal combustion engine (ICE) vehicles. At the time, the former were considered to be a substitute for the ICE engine in terms of their use. Additionally, duties are typically only reduced in instances where there are no production capabilities and there is no probability of future production in the country.
Response: This is not a reason to not review the duties. These duties were set more than 20 years ago, when EVs were golf carts. Maybe the duties should remain, but it's not clear how this conclusion can be reached without an investigation.
Itac: For solar panels, Itac received a request to raise customs duties. After a probe, Itac recommended a temporary rebate provision to protect local importers due to limited domestic production capacity and the economic implications of increasing duties during load-shedding.
Response: This is true but doesn't explain why it took over five years to take the decision.
