Published By GlobalTrade Customs (Pty) Ltd
Understanding SARS Ad Valorem Duty in South Africa
When importing goods into South Africa, one of the most important cost components to consider is Ad Valorem Duty — a duty calculated as a percentage of the customs value of the goods. The term ad valorem is Latin for “according to value”, meaning that the higher the value of your goods, the higher the duty payable.
In South Africa, Ad Valorem Duty forms part of the ordinary customs duty listed under Schedule 1 Part 1 of the Customs and Excise Act 91 of 1964. It applies to a wide range of imported items such as vehicles, electronics, jewellery, luxury clothing, and various consumer goods.
- What Is Ad Valorem Duty?
Ad Valorem Duty is a percentage-based import tax imposed by the South African Revenue Service (SARS).
It is levied on the customs value (CIF value) of imported goods, which includes:
- C = Cost of the goods
- I = Insurance
- F = Freight and related charges
For example, if your imported item’s CIF value is R100,000 and the ad valorem duty rate is 20%, you’ll pay R20,000 in customs duty — before VAT and other taxes are added.
This type of duty is most commonly applied to finished, high-value, or luxury items, as opposed to raw materials or intermediate products.
- Where Is Ad Valorem Duty Found in SARS Tariffs?
SARS publishes the Customs Tariff Book, which is divided into schedules under the Customs and Excise Act.
The ordinary customs duties — including ad valorem rates — are contained in Schedule 1 Part 1.
Each product has a tariff heading (based on the Harmonized System Code) that specifies the applicable rate of duty.
Some examples include:
| Product | HS Code | Duty Type | Rate of Duty |
| Passenger motor vehicles | 8703.23 | Ad Valorem | 25% |
| Television sets | 8528.72 | Ad Valorem | 15% |
| Wristwatches | 9102.21 | Ad Valorem | 20% |
| Jewellery of precious metals | 7113.19 | Ad Valorem | 10% |
- How SARS Calculates Ad Valorem Duty
SARS determines the duty payable based on your declared customs value and the relevant tariff rate under Schedule 1.
Formula:
Ad Valorem Duty = (Customs Value × Duty Rate)
Once the duty is determined, SARS also adds VAT (15%) on the total landed cost, which includes the customs value, the duty, and other applicable charges (e.g., environmental levies, ad valorem excise, or surcharges).
- Common Mistakes Importers Make
Many importers in South Africa lose money or face penalties because of incorrect tariff classification or undervaluation.
Typical errors include:
- Using the wrong tariff heading or HS code
- Declaring an incorrect customs value
- Failing to identify additional ad valorem excise under Schedule 1 Part 2B
- Ignoring preferential trade rates under SADC or AfCFTA agreements
Incorrect declarations can result in SARS audits, penalties, or backdated duty payments, which may severely affect business cash flow.
- How Ad Valorem Duty Affects Your Business
For importers, ad valorem duties directly influence:
- Product pricing and profit margins
- Supply chain decisions (e.g., sourcing locally vs. internationally)
- Cash flow and budgeting for customs clearance
- Compliance risk with SARS
Understanding how these duties work — and which goods attract them — helps you plan your imports efficiently and stay compliant.
- How GlobalTrade Customs (Pty) Ltd Can Assist
At GlobalTrade Customs (Pty) Ltd, we help importers and businesses navigate the complex SARS tariff system, ensuring full compliance while minimising overpayments on duties.
Our services include:
- Accurate tariff classification under Schedule 1 Part 1
- Duty and VAT calculation support
- Preferential trade agreement utilisation (SADC, AfCFTA)
- Assistance with rebates, refunds, and drawbacks
- SARS dispute resolution and customs valuation guidance
We ensure your goods are correctly classified, your duties are accurately calculated, and your business remains compliant with all SARS customs requirements.
No comment