On 24 August 2021 ITAC initiated an investigation into increasing the duties on certain categories of uncoated paper.  The investigation is in response to an application by Mondi South Africa (Pty) Ltd to increase the Customs duty on rolls, sheets and strips of uncoated paper classified under tariff subheadings 4802.55.20, 4802.57.20 from duty-free to (presumably) 5%, which is the bound rate. Mondi has requested separate 8-digit tariff subheadings be created to accommodate the specific weight category on which Mondi is requesting additional duty protection.

Mondi also requested a duty increase on sheets of paper classifiable under tariff subheading 4802.56.90, currently attracting a 10% Customs duty. This can be increased to the bound rate of 20%. In 2014 the Paper Manufacturing Association of South Africa (“PAMSA”) applied for the increase of duty on sheets of paper on behalf of SAPPI (Pty) Ltd and Mondi (Pty) Ltd from 0% to 20%. The outcome of this investigation was the 10% duty currently in place.

The product categories under investigation are also referred to as uncoated fine paper or UFP. This kind of paper is typically used as office paper, or in printing applications where the glossy finish provided by coated paper is not required. The single most significant application of uncoated paper, outside the office environment, is the printing of educational and training material like textbooks and exercise books for use in schools.

In its application Mondi indicates that additional tariff protection is required to assist Mondi in a depressed market, further affected by the impact of COVID-19. This concern appears to be aligned to global trends where the printing and publishing sectors have been under pressure due to the growth of electronic media. Over the past five years import volumes of the broader product category into SACU have shown a downward trend and the average import price has increased notably, so imports trends do not appear to be the primary motivation for the application.

Whilst an increase in duty on the products under investigation may assist Mondi in the short term, it will place additional pressure on the printing and publishing industries. It will also have a substantial impact on the cost of printing of scholastic material, which represents the single largest application of the products under investigation.

The deadline to respond is 21 September 2021

For more information contact us at info@xa.co.za

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