Defy have requested an increase for duty on fridges on “Combined refrigerator-freezers, fitted with separate external doors: Other”.
Based on how the tariff is currently structured, we now have a separate tariff code for those fridges with a capacity not exceeding 400 litres and those exceeding 400 litres. The current request would cover refrigerator-freezers with a capacity exceeding 400 litres. Duty on fridges below 400 litres will not be investigated and will remain at 25%.
The current duty on fridges with a capacity above 400 litres is also 25%, but if this application is successful, the duty will increase to 30% (the bound rate).
The reasons given for the duty on fridges increase are:
- The global steel crisis is severely impacting the entire SACU steel value chain. This is particularly true for the white goods industry in SACU, which is currently struggling to sustain jobs and investment;
- During November 2014, Defy re-launched its East London plant following an investment of approximately R120 million to manufacture side-by-side refrigerators;
- This investment was at the back of a growing consumer base in Africa fuelled by a growing middle class;
- The domestic white goods industry has been under pressure, as a result of increasing low priced imports and this has put the viability of the SACU industry at risk;
- The increase in customs duty will ensure job retention, additional market share locally, and enable competitiveness in the export markets; and
- The increase in tariff will also be instrumental in supporting the current and future plans for the introduction of additional product range by Defy.