Over the past few months we have noticed the increasing number of protectionist measures implemented by SARS. From glass, fasteners, polyethylene and this time tinplate.
A 10% import duty has been imposed on tinplate with effect from 16 August 2019. This effectively raises the duty to the bound rate (the maximum allowable rate under the WTO). The subject product is flat rolled products of iron or non-alloy steel, clad, plated or coated with tin, classifiable under tariff subheadings 7210.11, 7210.12.10, 7210.12.90 and 7212.10.
ITAC’s rationale for the duty increase
In making a final determination, ITAC considered the following factors:
- The rising level of imports and the erosion of the market share of the only SACU manufacturer
- The considerable decline in the level of production, sales and capacity utilisation of the domestic tinplate manufacturing industry.
- The worsening competitive portion of the domestic manufacturing industry as a result of escalating cost structures
- Diminishing domestic employment and investment opportunities
- The strategic nature of the steel industry to the country, given its backward and forward linkages
The Commission concluded that the duty increase should enable local manufacturers to utilise their under-utilised production capacity, achieve economies of scale, resulting in security of volumes with a reduction in the marginal cost of production.
The Commission further recommended that the duty be reviewed after 3 years to ascertain the impact on the industry.