South African Revenue Service (SARS) is taking firm action to combat tax evasion by international online retailers like Shein and Temu, who have been exploiting tax gaps to provide competitive pricing. SARS is revamping its tax rules and administrative procedures to extract taxes more efficiently from these platforms, and packages will be taxed at 45% plus VAT, the same percentage as local clothing retailers. SARS aims to forge a balanced marketplace for all retailers by plugging these tax gaps and conveying a potent message to online retailers that the era of tax loophole exploitation is coming to an end.
