Consumers hit with huge tyre levy hike

By Gavin Kelly – Chief Executive Officer: The Road Freight Association

THE Department of Trade, Industry and Competition (DTIC) has published anti-dumping protection levies on the importation of tyres into South Africa: “in terms of section 57A of the Customs and Excise Act, 1964. This provisional payment in relation to anti-dumping duty is imposed up to and including 8 March 2023”. A schedule was published with the announcement. The anti-dumping duty is levied at 38,8% on the imported price of the tyres.

Together with other transport-related organisations and associations, the Road Freight Association (RFA) had earlier engaged with the DTiC – and bodies involved in the retail and wholesale tyre sectors – to gain clarity on why these anti-dumping duties would be implemented, given the inability of the local manufacturing industry to meet local consumption demands, as well as to ascertain how the local manufacturing industry would be adversely affected. Tyres are imported from various markets – precisely because South Africa does not have the capacity to meet local consumption.

Will the DTiC be using these levies collected on imported tyres to fund the development of a local tyre industry, specifically for local manufacture? Will tyres that are locally manufactured also include the price hike? What is the plan by the DTiC to ringfence such levies collected, to ensure that the local industry is developed and grown?

A 38,8% increase on the price of tyres will impact on the operational costs of transport, driving the price of the transportation of goods up by at least 8% – depending on the transport leg variables, this could be more. This means that, despite the dire economic situation in the country, consumers will pay more for goods. This will drive inflation – if not higher, it will definitely hold off any decreases from occurring a lot sooner than hoped.

Tyre prices incurred the normal annual increase in July 2022 – which was 5,9%. By adding the anti-dumping levy, tyre prices will now increase by a whopping 44,7% in a single year. This is untenable for any transport operation – whether moving freight or passengers – and will see increases inevitably being passed on to consumers.

Tyres are a crucial link in the safe and efficient operation of a vehicle. They also affect the fuel consumption of a vehicle and the type of wear and tear that is experienced by the road surface. The country cannot have a situation where tyres become so expensive that fleet owners and private individuals begin to push tyres to the extreme limits of wear and endurance.

The Association has appealed to the DTiC to reconsider this decision and proposes that, once there is sufficient sustainable capacity in the country, that the possible introduction of an anti-dumping levy is then considered to protect a local tyre manufacturing industry that actually produces enough tyres to meet local demands.

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