Business

8,000 Jobs Lost to ‘Customs Loophole’: Calls for Ministers to Face Parliament

Published

2 months ago

August 12, 2025

Chiraag

customs loophole South Africa, Shein Temu job losses, ActionSA calls for accountability, Parliament hearings on trade, South African clothing industry decline, Parks Tau Enoch Godongwana Edward Kieswetter, R-CTFL sector, Joburg ETC

Report sparks political firestorm

South Africa’s clothing, textile, footwear, and leather sector has been dealt a major blow, and now, three top officials could be facing tough questions in Parliament.

ActionSA says it has formally called for the Minister of Trade, Industry, and Competition, Parks Tau; the Minister of Finance, Enoch Godongwana; and SARS Commissioner, Edward Kieswetter, to urgently appear before parliamentary committees. The demand follows a new Localisation Support Fund (LSF) report revealing that fast-growing Chinese online retailers Shein and Temu may have cost the country more than 8,000 potential jobs in the last four years.

How a small-rule loophole caused big damage

Between 2020 and 2024, the two e-commerce giants reportedly exploited the “de minimis” customs rule, which allowed parcels valued under R500 to enter South Africa with a flat 20% duty and no VAT. According to ActionSA, Shein and Temu split large customer orders into multiple low-value parcels to benefit from this, while local businesses importing similar goods faced up to 45% duty plus 15% VAT.

The report estimates that Shein and Temu generated R7.3 billion in sales in this period, capturing 3.6% of the country’s total R-CTFL retail market and an astonishing 37% of online sales. In contrast, local producers are said to have lost R960 million in manufacturing sales, translating to 2,818 lost manufacturing opportunities and 5,282 missed retail jobs.

Government action came late

The “loophole” was closed by SARS and the Department of Trade, Industry and Competition (DTIC) in late 2024, but critics argue the damage was already done. ActionSA insists the responsible officials must account for their inaction and outline how similar scenarios will be prevented.

“The government allowed this practice for four years while local industries and workers paid the price,” the party said, adding that it would write to Parliament’s finance and trade committees to demand urgent hearings.

Retailers respond

Shein acknowledged its growing footprint in South Africa, describing its model as “customer-driven” and “on-demand,” enabled by digital supply chain technology to adapt quickly to shoppers’ preferences. Temu also responded, saying it has expanded the range of quality products available to South African consumers, offering “greater choice and access to items that meet their needs.”

Bigger than just fashion

While Shein and Temu’s popularity has soared among South African shoppers seeking low prices and variety, this dispute highlights a deeper tension between global e-commerce convenience and protecting local industries. Local retailers told media they have already seen social media complaints about higher Shein prices since the rule change, suggesting the clamp-down is starting to filter through to consumers.

If Parliament takes up the call for accountability, the hearings could set a precedent for how South Africa deals with fast-moving global retail trends in the future.