Temu exploiting tax loopholes — South African retailers

South African retailers have urged the government to plug tax loopholes that they fear are being used by Chinese e-commerce platform Temu, amid its rapid growth in the country, News24 reported.

Similar concerns have also been raised about Shein, another Chinese online platform, News24 said.

Etienne Vlok, a national industrial policy officer for Southern African Clothing and Textile Workers Union, told the publication the government should consider urgent changes to tax rules on small items to ensure fair competition for local businesses.

The Chinese retailer disagreed with the suggestion that it was relying on the so-called de minimis rule that lets goods of low value enter South Africa, while avoiding customs declarations or duties.

“The primary drivers behind our rapid expansion and market acceptance are the supply chain efficiencies and operational proficiencies we’ve cultivated over the years,” Kieran Powell, a Temu spokesperson, said by email to Bloomberg News.

The online shopping juggernaut backed by China’s PDD Holdings Inc. has offered huge discounts in South Africa since its launch in January.

The firm has expanded its global footprint to 49 countries and recently took out ads at the Super Bowl to try and sustain growth among US consumers.

“We are open to and supportive of any policy adjustments made by legislators that align with consumer interests,” Powell said.

“We believe that as long as these policies are fair, they won’t influence the outcomes of competitive business dynamics.”

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Temu exploiting tax loopholes — South African retailers