Why gifts sent from abroad could cost you

Why gifts sent from abroad could cost you

This week’s show was a cautionary tale for people who’re expecting Christmas presents from family members or friends based overseas. 

Why gifts sent from abroad could cost you

Here’s the deal with receiving gifts sent from overseas, either by post or by courier: the SA Revenue Service (SARS) only considers a parcel entering this country to be a gift - in other words, there’s no customs duty and VAT payable - if its declared value is no more than the equivalent of R400.

Thanks to the recent dramatic devaluation of the rand, R400 is now just $29 US dollars, 26 Euros, 19 pounds and 41 Australian dollars.

So no wonder I’m getting a lot of complaints from those who’ve been “caught” with customs duties - it’s really easy for people living overseas to unwittingly send a gift which will cost the South African recipient quite a bit to get their hands on, because it’s considered a business transaction.

Especially as, in the cases I’ve taken up, the courier company staff and post office employees aren’t warning consumers about it.

And here’s the thing - that R400 limit was set way back in 1993 - 22 years ago when the rand-US dollar exchange rate was less than R4. It’s now more than R13. 

Who sets the R400 limit?

So I asked the SARS if it had any plans to increase that R400 limit, and I was told by acting spokesman Luther Lebelo that SARS doesn't set trade policy; it merely administers trade laws that are relevant to SARS.

That limit is set by the International Trade Administration Commission of SA, which is part of the Department of Economic Development.

To my mind it’s not only ridiculous but utterly unfair to have not adjusted that limit for all these years as the rand has plummeted, with the result that a lot of people are being made to pay for presents as if they were goods they ordered from overseas and paid for as a business transaction.

That Commission urgently needs to increase that R400 limit.

Toya's hefty bill 

Here’s a typical case highlighting the financial consequences of the low gift value limit and the lack of awareness around it.

Toya Moodley of Verulam’s son Vivek, who recently emigrated to the UK, bought two dresses and a jersey, parcelled them up as a gift for his mother’s birthday in September and took them to DHL in London, to courier to Verulam.

He declared the value of the clothing - 190 pounds - and paid DHL another 86 pounds to courier the parcel to Verulam.

But when the parcel arrived in SA, DHL said another R2613,80 was due in customs duties and VAT.

Toya feels strongly that, given the financial implications, DHL in London should have warned him about the R400 limit, and that fact that a gift to the value of 190 pounds (about R3600) was going to attract a lot in customs duties.

Customs expert weighs in 

DHL Express Sub Saharan Africa managing director Hennie Heymans told Consumerwatch that the company’s terms and conditions which the sender has to acknowledge with a signature, clearly state that the sender is responsible for paying duties and taxes.

In other words, it’s in the small print.

Heymans said the company could only disclose the customs fee once the shipment had arrived in the country and the required VAT and duties had been determined by customs.

Yes, of course, but the warning about the R400 limit can be given verbally, and in my view, should be.

Heymans said that “guidance” on duties payable was published on the company’s South African website, and the company would be issuing press releases on the topic ahead of the festive season.

Of course the simple solution would be for that limit to be increased to a more realistic amount, in keeping with the devalued rand.

Clearly many people simply don’t declare the real value of their gifts, in order to avoid the recipient being landed with hefty customs duties.

But Toya has a big problem with that.

“I have spoken to so many people about this, because it has upset me. Many said the solution is to falsify the value of the gift. But I don’t think that’s right - why should we have to be dishonest and put a wrong amount?”

Why indeed.

For now though, here’s the deal - South Africans can receive two gifts per calendar year, sent from abroad, neither exceeding R400 in value. Wines, spirits, tobacco products and perfume are excluded from this customs duties.

Here are the items Toya received from abroad. 

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