Donald MacKay, CEO of XA Global Trade Advisors, is a tenacious proponent of the idea that import tariffs should serve a purpose, and be scrapped when they are no longer needed.
MacKay’s latest salvo comes in his company’s fifth analysis of South Africa’s import tariffs. The conclusion is that 93% of import tariff codes applied in 2023 last had their duty levels reviewed more than 20 years ago.
Some R81 billion was paid in import duties over 12 months on these tariff codes, out of a total of R87 billion in total import duties paid for the period.
“Perhaps some of these duties should remain, but it’s not clear how this can be known without a formal review, where comments are requested, and the proper cost-benefit analysis is done,” MacKay says.
“If only 10% of these duties are found to no longer be appropriate, this would put R8 billion per annum back into the productive part of the economy.”
These delays are not benign, MacKay says.
“Predictable government policy is the bedrock of positive investment sentiment. If a promise is made to review the duties on a product within three years, do the review. The Itac website says a tariff investigation will finish in six months, so don’t take five years.
“Replace the years of haggling with companies to extract commitments, with economic studies to determine if the decisions are good or bad.
“There can be no growth without investment, so let’s make it easier to invest. Predictable government policies are one important way to get there,” Mackay states.
Now he has to persuade the government to forego all that tariff revenue.
