Textile pricing database begins to bear fruit

The introduction by SA Revenue Service last year of a reference pricing database mechanism to address under-valuation of imports in the clothing and textile industry has achieved some measure of success in limiting the scale of illegal imports. “But it’s early days – and it’s a work in progress,” says Brian Brink, executive director of the Textile Federation. The reference price applies to a number of products – yarns, fabrics and made-up textiles – and acts as a trigger to help Customs when a product is cleared or declared below those reference prices, says Brink. “Sars will then have a closer look and maybe call in expert advice or documentary proof. There does seem to be some improvement – but there’s a long way to go.” Through its modernisation programme, Sars has developed a massive database that tracks any exceptions. If, for example, a company has for the past several years been importing through Durban and now moves its cargo through PE, they have a track record and know what normal practice would be. While it may be that the ship wasn’t able to dock in Durban, it could also, for example, be related to Sars tightening up procedures in Durban and must therefore be investigated. And while this impacts on the individual shipper to a greater or lesser extent, and is an irritant in some cases, as long as everyone is driving at the same speed and no-one is getting preferential treatment, Brink believes it’s for the good of the industry. Sars last year singled out undervaluation in the textile industry as one of the seven broad priority areas of focus over the next five years. The move was motivated by concerns that the industry was being threatened by noncompliance related to valuation as well as country of origin and tariff misclassification which opens doors to the dumping of goods and under-cutting of prices, all of which affect the viability of the domestic industry.