This year marks the 331st anniversary of the imposition of tariffs, better known as customs duties, in South Africa.  Tariffs were imposed after the Cape (the Cape Colony) came under the control of the Dutch East India Company (DEIC).

It is quite possible that customs duties were imposed prior to 1678, with European settlers arriving at the Cape in 1652, but their regular use is only documented from 1678. The use of customs duties has, without question, been an integral part of South Africa’s economic history and development, and even to this day remains important as a public instrument, even though, as a fiscal measure, the use of customs duties has diminished significantly in recent years.

The origin of customs duties in South Africa has always intrigued me since I started my working life specialising in the application and use of customs duties and excise duties. As with all things in life that are of interest to one, the frustrating thing is the difficulty of  finding real information on the topic. If anything, finding information on the history of duties and their application in South Africa from 1652 to date is a near-impossible endeavour. (If you could assist in in this respect, I would appreciate hearing from you.) With the use of duties certain to outlive us all, it is worthwhile reflecting on, and remembering, its history.

In 1678, with the Cape under the control of the DEIC, customs duties were imposed on all goods brought (imported) into the colony by ship crews and offered for private sale. The reason for the imposition of customs duties was that the Cape, under the DEIC, was unsuccessful in exercising complete monopoly of the trade of the colony. The 'Fiscal', also known as the governing authority, was permitted to levy such duties for its own benefit. This practice continued until 1789, when a duty of 5% was imposed on all goods imported and exported, except those of the DEIC

The revenue collected was also for the benefit of the DEIC In 1793, the commissioners-general reiterated the imposition of the duty of 5%, but ordered that the revenue be paid into the National Treasury.

In 1795, the Cape came under the control of Great Britain, and this remained the case until 1803. It was an interesting time in British colonial policy, with the loss of the American colonies having discredited its policy of monopolising trade with its colonies and excluding foreign ships and traders. The new policy was not intended to prohibit its colonies from trading with foreign countries; however, it sought to establish a system of reciprocal preferential duties for the protection of British trade and shipping.

As a consequence, British goods were generally imported into the Cape free of duty, while goods from other countries were subject to duty. In instances where British goods were subject to duty, it was at a rate which was lower than that applicable to foreign goods. In return (reciprocal treatment), the Cape’s exports to Britain were also subject to a lower rate of duty than that applicable to foreign goods.

From 1795 to 1797, foreign ships were not allowed to land any goods at the Cape, except by special permission. In such instance, the imported goods were subject to a 10% ad valorem duty (meaning on value duty). English ships were only subject to a 5% duty.

An export duty (South Africa does not have such a duty any longer) of 5%, which was introduced by the company, was retained. In 1797, the ports were opened and an elaborate system of differential duties was introduced. Of course, in favour of British goods and ships. To this day, South Africa still has a tariff structure of differential duties.
Next week, we will review the Cape under the Bavarian Republic (1803 to 1806) and beyond.