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The system is broken
Donald MacKay, director of XA International Trade Advisers in Johannesburg is arguably the most knowledgeable outsider on the inner workings of South African Byzantine trade policy mechanisms — the matrix between the International Trade Administration Commission, the Department of Trade, Industry and Competition, the National Treasury and the South African Revenue Service is pretty much impenetrable but MacKay has stared at it long enough to know that something is going badly wrong. XA has just published a report describing the extent to which investigations for decisions on applications by South African employers for import duty rebates or for the removal of duties, are running over the normal six months.
Some are now nearly two years old. Many more than a year old. In total, some R2.1bn of duties paid are the subject of complaint and possible legal action as a result, of duties being imposed unfairly by the Dtic and Sars. Some are for the import of products that are not even made in South Africa and are therefore not capable of being protected. This is part of the madness of central planning, of Dtic minister Ebrahim Patel’s “localisation” policies. “The process seems to be broken at the moment,” MacKay tells Peter Bruce in this edition of Podcasts from the Edge.
That would be an understatement. Patel has been forced to lift punitive anti-dumping duties on chicken imports because his protection of the local industry has allowed it to overcharge for local chicken, starving the poor of vital protein. The cost of importing an electrically-powered car is still cripplingly high though, even though fuel costs have risen even more quickly than foods. And now the minister plans to try to ban the export of scrap. It is a popular move because it plays to the myth of infrastructure being stolen for export but, in fact, if it already almost impossible to export scrap and the last time it was banned, in 2020, the assault on our infrastructure reached an all time high.
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Donald MacKay, director of XA International Trade Advisers in Johannesburg is arguably the most knowledgeable outsider on the inner workings of South African Byzantine trade policy mechanisms — the matrix between the International Trade Administration Commission, the Department of Trade, Industry and Competition, the National Treasury and the South African Revenue Service is pretty much impenetrable but MacKay has stared at it long enough to know that something is going badly wrong. XA has just published a report describing the extent to which investigations for decisions on applications by South African employers for import duty rebates or for the removal of duties, are running over the normal six months.
Some are now nearly two years old. Many more than a year old. In total, some R2.1bn of duties paid are the subject of complaint and possible legal action as a result, of duties being imposed unfairly by the Dtic and Sars. Some are for the import of products that are not even made in South Africa and are therefore not capable of being protected. This is part of the madness of central planning, of Dtic minister Ebrahim Patel’s “localisation” policies. “The process seems to be broken at the moment,” MacKay tells Peter Bruce in this edition of Podcasts from the Edge.
That would be an understatement. Patel has been forced to lift punitive anti-dumping duties on chicken imports because his protection of the local industry has allowed it to overcharge for local chicken, starving the poor of vital protein. The cost of importing an electrically-powered car is still cripplingly high though, even though fuel costs have risen even more quickly than foods. And now the minister plans to try to ban the export of scrap. It is a popular move because it plays to the myth of infrastructure being stolen for export but, in fact, if it already almost impossible to export scrap and the last time it was banned, in 2020, the assault on our infrastructure reached an all time high.
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