NCC and SARS Collaborate to Combat Non-Compliant Imports and Illicit Trade

The National Consumer Commission (NCC) and the South African Revenue Service (Sars) have entered into a memorandum of understanding (MoU) focused on enhancing enforcement against non-compliant imports, tax evasion, and unsafe products in the South African market.

This agreement aims to bolster collaboration between the two organizations through joint investigations, information sharing, and coordinated enforcement initiatives, particularly in sectors susceptible to illegal trade and regulatory violations.

Read: Counterfeit goods make up 10% of South Africa’s economy

A significant emphasis of this partnership is on the clothing, textile, footwear, and leather (CTFL) industry, where authorities have noted that some importers evade customs duties and taxes, resulting in unfair competition and risking the availability of substandard goods for consumers.

The MoU also addresses increasing concerns regarding e-commerce imports, such as mislabelled products and non-compliance with consumer protection and customs regulations.

As part of this agreement, the NCC and Sars will work together to identify violations of Section 26 of the Consumer Protection Act, including the failure to issue valid invoices or provide value-added tax (VAT) registration details when required.

This arrangement also establishes mechanisms for the NCC to report suspected tax and customs breaches to Sars, including businesses that may not be appropriately registered for tax or customs obligations.

Sars Commissioner Dr. Johnstone Makhubu states that this partnership enhances the government’s capacity to combat illicit trade and boost compliance.

“This partnership significantly improves our ability to identify and take action against non-compliant imports and tax evasion,” he remarks.

Makhubu further notes that the agreement is in line with the government’s broader National Illicit Economy Disruption Programme, as highlighted by President Cyril Ramaphosa during the State of the Nation Address.

“It allows us to better safeguard the economy while ensuring that all traders adhere to fair and lawful practices,” he adds.

Read: South Africa loses $62 billion annually due to illicit financial flows

Acting NCC Commissioner Hardin Ratshisusu emphasizes that the agreement strengthens the commission’s responsibility to protect consumers from unsafe and poor-quality products.

“Consumers have the right to safe, high-quality goods and fair market practices,” he asserts.

“This collaboration facilitates more effective actions against prohibited conduct while enhancing accountability throughout the value chain.”

Officials indicate that this agreement is part of a larger government initiative to enhance oversight of cross-border trade and to improve enforcement collaboration among state entities.