Why do applications for tariff changes or anti-dumping duties take so long?
Trade advisor Donald MacKay has lifted the lid on the processes involved, suggesting that the decision-making process could be a lot quicker than the 18 months to two years that is the norm in South Africa.
He says that much of the delay comes from the government departments that have to take a decision following an investigation by South Africa’s trade regulator, the International Trade Administration Commission (ITAC), into an application for a tariff change.
The norm, according to ITAC, is that tariff investigations should take four months for industries in distress, and six months for the rest. In reality, Mackay says ITAC will take 10 months to investigate a duty increase, and another 11 months for it to be approved by the ministers of Finance and of Trade, Industry and Competition.
“ITAC will wrap up a duty reduction or rebate investigation in three months, but then it will sit with those same two ministers for another 12 months before being implemented,” MacKay says.
He reckons R1.25 billion in import duties is lost because of these delays, and a further R2bn would have been put back into the economy because of the duties collected. Instead, inertia “gums up the works” and the uncertainty stops investment.
For Mackay, the problem is easily solved.
“Most of the overdue investigations have been completed by ITAC, and their recommendations are with one of the ministers. All these ministers need to do is make a decision. Not a speech or a promise. Just a decision.”
That would put a lot of money into the economy, add to revenue collection and result in investment and job creation, MacKay says.