The International Trade Administration Commission of South Africa (Itac) has published a proposed increase in the ‘general’ rate of customs duty on phosphoric and polyphosphoric acids, classifiable under tariff subheading 2809.20, from free of customs duty to 10% ad valorem, through the creation of an additional 8-digit tariff subheading.
The tariff subheading is proposed to read “Diphosphorus Pentaoxide; Phosphoric Acid; Polyphosphoric Acids, whether or not Chemically Defined: Of a phosphorous content of 78 per cent or more.”
The application was lodged by Chemical Initiatives (Pty) Ltd, a Subsidiary of AECI Limited, who reasoned that (i) Chemical Initiatives (Pty) Ltd has come increasingly under pressure from imports due to increasing raw material costs as a result of the 20% export duty imposed by the People’s Republic of China on yellow phosphorus. (ii) Chemical Initiatives (Pty) Ltd competes with imports from Chinese manufacturers who are not impacted by the 20% export tax on yellow phosphorus and therefore have lower raw material costs and consequently a significant price advantage over locally produced phosphoric and polyphosphoric acids. (iv) The customs duty protection is necessary to make Chemical Initiatives (Pty) Ltd’s price more competitive against imports. Without protection of local manufacturers, local production will be lost to imports costing the Southern African Customs Union (SACU) economy jobs and investments. (v) A 10% customs duty will assist Chemical Initiatives (Pty) Ltd in cutting back on imports by increasing local production. Chemical Initiatives (Pty) Ltd already has existing capacity and is able to supply the local market.
Comment due is due by 16 March 2018.