The Tyre Importers Association of South Africa (Tiasa) has commenced legal steps to reverse the decision taken by the International Trade Administration Commission (Itac) to impose provisional anti-dumping duties on tyres imported from China.
Read: Higher anti-dumping duties imposed on tyres from China
Tiasa chair Charl de Villiers said on Wednesday the association’s attorneys this week served notice on the South African Revenue Service (Sars), as required in terms of Section 96 of the Customs and Excise Act, that Tiasa will be commencing with legal proceedings against Sars.
He said Tiasa will be lodging a high court application to reverse the decision taken by Itac to impose these provisional anti-dumping duties on the basis that the legislation Itac relied on to impose these provisional duties has not been promulgated.
“Section 30 of the International Trade Administration Act 71 of 2002 has not come into effect yet. It hasn’t been promulgated by government. It hasn’t been through parliament.
“They are relying on that piece of legislation and we are saying you can’t rely on a piece of legislation that is not there,” he said.
The provisional anti-dumping duty will remain in place until 8 March next year and will lapse if Itac has not issued a final determination by then.
Read: Dispute over higher tyre import duties intensifies
De Villiers said the Sars litigation unit has acknowledged receipt of the notice.
Sars has not yet responded to a Moneyweb request for confirmation of this. Comment has also been requested but not yet received from Itac.
De Villiers said Tiasa’s attorneys will now be preparing the court application to reverse the provisional anti-dumping duties, which will be served on Minister of Finance Enoch Godongwana; Minister of Trade, Industry and Competition Ebrahim Patel; Sars Commissioner Edward Kieswetter; Itac; and the SA Tyre Manufacturing Conference (SATMC). SATMC’s members are the four domestic tyre producers – Bridgestone, Continental, Goodyear and Sumitomo.
De Villiers said Tiasa will not be bringing the application on an urgent basis, as its attorneys have advised that it would be thrown out on urgency because “the house is not burning down”.
“Yes, the consumer will end up paying more but this is only for a provisional period of six months until the final [Itac] determination has been made, so we did not bring it as an urgent application.”
He added that Tiasa wants a previous high court application to compel Itac and the SATMC to disclose critical information about the latter’s application that is being withheld.
Read/listen: SATMC: Why we proposed the tariffs on imported tyres
“We will be writing to the deputy judge president requesting that, in the interests of the public, we actually move the hearing forward as far as possible and to have the two matters heard together.”
De Villiers said that apart from the planned legal action, Tiasa will submit a request to make oral submissions to Itac and has also given notice to Itac of its intention to oppose SATMC’s application.
Protection vs safety
SATMC applied to Itac for protection because tyres were allegedly being imported into South Africa at “unfairly low prices”.
Tiasa said government’s rationale for the imposition of the duties is ostensibly to help protect local manufacturers but local manufacturers themselves have to import 80% of the over 3 000 different models of tyre ranges they sell.
Read/listen: Proposed tyre import duties set to hike transport, goods prices
The Automobile Association (AA) has now also been drawn into the fray, claiming on Wednesday that these provisional duties are a major blow to road safety and demanding that they be reversed immediately.
The association expects already embattled consumers to balk at the higher prices and therefore use tyres that are in poor condition because they cannot afford to replace them.
It pointed out that the additional provisional duty imposed on tyres from China is on top of existing excise duties, of between 25% and 30%.
“Tyres sold locally will now have an excise loading of between 63.33% and 68.33%.”
The AA said it supports calls from organisations such as Tiasa that the decision to add the extra excise duties be reversed.
“Government’s approach should be geared towards creating jobs and a sustainable economy, supported by tougher measures to curb corruption and to ensure the proper allocation of funds.
“In our view the issues around tyre pricing are symptoms of deeper issues within the management of the country’s economy and consumers are now, again, being asked to carry the burden,” it said.
“Government should immediately reverse the introduction of the additional excise duties and find a better, more long-lasting solution to the problem in the tyre sector that doesn’t impact negatively on consumers.”
The association said those with private transport will now have to pay more for tyres, essential safety equipment on vehicles, something it does not believe will happen.
“Public transport providers such as buses and taxis will either not pay the new prices or merely pass the increases to their passengers. Both options are unacceptable.”
The AA said Road Traffic Management Corporation (RTMC) statistics show that 12 541 people died on the country’s roads in 2021.
It said human error, environmental conditions and vehicle factors, such as bursting or smooth tyres, poor brakes and faulty headlights, contributed to these deaths.
Read: SA motorists, transport operators ‘will be hardest hit by proposed tyre duties’
The AA said bursting and smooth tyres contributed to 49% of deaths in the vehicle factors category.
“The new prices will significantly increase the replacement cost of tyres, forcing many motorists to drive on tyres they should not,” it said.
“The incidents of bursting tyres, we believe, will increase sharply because of this.”