Export Taxes as a Means to Protect South Africa’s Minerals Beneficiation Strategy

• Jurisdiction: South Africa
• Date: 25 May 2019
• Citation: (2011) 23 SA Merc LJ 407
• Published date: 25 May 2019
• Author: André Thomashausen
• Pages: 407-419

Export Taxes as a Means to Protect South

Africa’s Minerals Benef‌iciation Strategy*

ANDRÉ THOMASHAUSEN**

University of South Africa

1 Export Taxes

Since 2009, export taxation for ferrochrome and ferrochrome ore has been

high on the agenda of consultations between the vast majority of South

African ferrochrome producers and the Department of Minerals and Energy

(DMR). The industry seeks the adoption of two comprehensive government

measures, in order to protect and enhance the continuing benef‌iciation of

ferrochrome ore and exports of ferrochrome, namely: (i) a quota to be applied

on chromite ore exports, restricting integrated producers to 30 per cent of their

‘ore-equivalent’ Ferrochrome production capacity; and (ii) a tariff or duty of

$100 per ton of ore to be payable on chromite ore exported.

Other South African benef‌iciation industries are increasingly sympathetic

with the position assumed by the ferrochrome industry. They too are

challenged by cheaper products manufactured in the Far East with raw

materials procured freely and cheaply in South Africa.

The WTO system does not prohibit export taxes. About one third of WTO

Members impose some kind or other of export duties or taxes, with both terms

referring to or describing the same f‌iscal measures.

The multilateral trading system established by the successive GATT

agreements, which were eventually bundled and integrated into the 1 January

1995 WTO Agreement, do not mention export taxes. No formal WTO/GATT

legal framework exists for Members to schedule commitments with respect to

exports. GATT Article II on Schedules of Concessions only concerns import

duties and charges in connection with importation. GATT Article VIII only

establishes certain criteria for ‘fees and charges of whatever character (other

than import and export duties. . .) which . .. shall be limited in amount to the

approximate cost of services rendered and shall not represent an indirect

protection to domestic products or a taxation of imports or exports for f‌iscal

purposes’.

The drafters of the GATT nevertheless considered the potential for

discrimination and trade distortion with respect to exports, besides their

primary focus on imports. General Most-Favoured-Nation Treatment under

GATT Article I(1) applies ‘[w]ith respect to customs duties and charges of

* This article is based on a paper presented at the Eighth International Workshop on Commercial

Law, hosted by the Centre for Business Law of the University of South Africa, on 3 August 2011 at

Nedbank in Sandton, South Africa.

** Dr Iur (Kiel); Assessor (Germany). Chair of the Department of Public, Constitutional and

International Law in the University of South Africa, Pretoria. e-Mail: thomaaea@unisa.ac.za.

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(2011) 23 SA Merc LJ 407

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