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Namibia under fire for non-implementation of SACU regulations on tyre duties

September 19, 2023 453

The Tyre Import Association of South Africa (Tiasa) has raised concerns over the alleged failure of Namibia to implement the Southern Africa Customs Union (SACU) regulations related to recent anti-dumping duties on tyres. 

Tiasa Chairperson and Managing Director of Treadzone, Charl de Villiers, revealed that Namibia's lack of enforcement has allowed for illicit practices in the tyre sector, costing South Africa billions in revenue and enabling counterfeit automotive parts to infiltrate neighbouring countries. 

He alleged that Namibia, a SACU member, "was not enforcing these duties, creating an incentive for importers to route their products through Namibia to evade taxes and duties". 

De Villiers pointed out that Namibia's lax approach to enforcing the duty regulations has resulted in misdeclarations within the tyre industry.

“My concern is if our neighbour Namibia is not implementing the tariff book that they all agreed on, where are we going? South Africa’s borders are already porous in terms of people coming in and products are now going to come in through other avenues as well,” he said according to Moneyweb News.

Individuals and businesses are reportedly exploiting loopholes by misclassifying imported tyres as non-tax items, such as rice or wheelchair tyres, which are not subject to duties.

He cited a specific example of tyres being imported via Namibia falsely labeled as "wheelchair tyres when they were actually ultra-high-performance tyres".

The situation has raised significant concerns, as it contributes to the growing problem of illicit financial flows (IFFs) in South Africa.

According to a pilot study conducted by the United Nations Convention on Trade and Development (Unctad), South Africa is losing a staggering $21.9 billion annually in inward IFFs and $40.9 billion in outward IFFs.

"These illicit financial flows not only deprive South Africa of much-needed revenue but also hinder progress in the development of critical infrastructure, including schools, hospitals, and safer roads," it is reported.

The issue was highlighted at a conference on increased illegal trading in automotive components held at the Automechanika event in Johannesburg.

Shawn Reddy, Motus aftermarket parts product marketing manager, also expressed concerns about the proliferation of counterfeit automotive parts.

Reddy stated that approximately 75% of automotive parts sold in the Nigerian market are counterfeit.

With South Africa's porous borders, there is a genuine concern that these counterfeit parts are infiltrating neighbouring countries like Niger and Cameroon.

"We've already seen the counterfeit market expanding into 'lubes,' which are oil brands, in our neighbouring countries, such as Mozambique and Zimbabwe," Reddy warned. 

Meanwhile, SACU Secretariat, Communications Manager Kungo Mabogo noted that it's important to note that these allegations do not represent the official position of the entire country. 

She highlighted that, "such statements must come from the President or an assigned government representative to be considered the official stance of South Africa." 

Moreover, Mabogo affirmed that the SACU Secretariat does not respond to opinions and only represents all its Member States when discussing matters within the SACU Agenda. 

"It is not the position of South Africa as a country. For an opinion to be cited as “South Africa” it MUST be made by the President, or someone assigned by the President to represent the Government. Unfortunately, we are not aware of anything that South Africa as a government is accusing Namibia of," she said. – The Brief/Moneyweb


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Last modified on Wednesday, 20 September 2023 17:27