South Africa has introduced a customs duty rebate on certain imported agricultural and forestry tyres after finding that the products are not manufactured locally.
The rebate came into effect on August 14 through an amendment to Schedule 4 of the Customs and Excise Act, following a recommendation by the International Trade Administration Commission (ITAC).
It applies to new pneumatic tyres used on agricultural or forestry vehicles and machinery, with a rim size of less than 91cm, classified under tariff subheading 4011.70.10.
The measure aims to reduce costs for the agricultural sector since there is no domestic production of the affected tyres.
ITAC found that there were no known manufacturers of the tyres in the Southern African Customs Union (SACU), following the closure of Bridgestone's Gqeberha manufacturing operation in 2020.
The commission said the existing customs duty therefore had an unnecessary cost-raising effect on the agricultural sector.
Imports of the affected tyres are currently subject to a general customs duty of 20%, while imports from the EU, UK, EFTA and countries qualifying under the African Continental Free Trade Area attract a10% duty. Imports from SADC countries are duty-free.
India and China are the dominant suppliers, collectively accounting for an average of about 89% of South Africa's imports of the affected tyres during the period assessed by ITAC.
The new provision does not remove the underlying tariff. Instead, it allows qualifying tyres to be imported under rebate item 460.07/4011.70.10/01.08 when the products are not available in the SACU market.
The rebate will be administered through permits issued by ITAC in quantities and at times determined by the commission.
Importers applying for permits will also be required to provide pricing commitments aimed at ensuring that the benefit of the rebate is passed on to the agricultural sector.
ITAC said the mechanism would provide temporary tariff relief while retaining the existing customs duty should local production of the tyres resume.
