For years, South African manufacturers have raised concerns about illicit trade, undervalued imports and VAT non-compliance. These practices undermine legitimate businesses, distort competition and place unnecessary pressure on manufacturers that comply with tax, labour and regulatory requirements. According to Greg Boulle, CEO of SAFI, the industry is now beginning to move beyond simply identifying the problem and towards implementing practical solutions.
“Manufacturers have been highlighting these challenges for many years,” says Boulle. “The difference today is that we are seeing meaningful collaboration between industry, government and enforcement agencies to better understand the scale of the problem and develop targeted interventions.”
Momentum is building behind a coordinated, cross-industry initiative aimed at tackling illicit trade and strengthening enforcement mechanisms. SAFI has been working closely with organisations including the Manufacturing Circle, the South African Revenue Service (SARS), the International Trade Administration Commission of South Africa (ITAC), the Localisation Support Fund (LSF) and a range of industry stakeholders to develop a structured response that addresses the root causes of unfair trade practices.
“One of the most encouraging developments is the willingness of different stakeholders to work together,” says Boulle. “Illicit trade affects the entire manufacturing value chain. Addressing it requires a coordinated approach that combines industry knowledge, credible data and effective enforcement.”
A major milestone was recently achieved when the LSF agreed, in principle, to co-fund research aimed at developing practical tools to identify, analyse and combat illicit trade. The project will focus on key furniture categories, raw materials and tariff lines where irregularities and under-declaration may be occurring. Industry participation will play an important role in ensuring that the findings reflect real-world conditions and support practical outcomes.
“Good policy decisions depend on good information,” says Boulle. “This research will help us better understand where the vulnerabilities exist and provide the evidence needed to support more effective interventions.”
At the same time, the Manufacturing Circle has established a framework for deeper engagement with government departments and regulators. This includes structured discussions with sector desks within the Department of Trade, Industry and Competition (the dtic), greater collaboration with SARS and ITAC, and efforts to improve access to trade data that can support evidence-based action. A focused industry working group is also being established to ensure manufacturers have a direct voice in shaping future tariff reviews, customs enforcement priorities and broader policy responses.
The issue extends well beyond the furniture sector. Discussions have evolved into a possible national campaign involving multiple manufacturing industries affected by illicit trade and VAT non-compliance.
“Whether it is furniture, forestry products or other manufactured goods, the impact is ultimately the same,” says Boulle. “Illicit trade erodes competitiveness, discourages investment, reduces tax revenue and places jobs at risk. That is why a united industry response is so important.”
Manufacturers themselves also have a critical role to play. Businesses that encounter suspicious import activity, pricing anomalies or customs irregularities are encouraged to engage through industry structures and contribute information that can strengthen the evidence base for enforcement action.
“There is still considerable work ahead,” concludes Boulle. “But the foundations for a far more coordinated and effective response are now in place. The industry has long called for action and, encouragingly, we are beginning to see that action take shape.”
