According to media reports, the government has extended the interim Textile and Clothing Industry Development Programme (TCIDP) until 31 March 2009. This follows a recent announcement by the Department of Trade and Industry of its review of tariffs on textiles which should help lower the cost of South Africa's clothing manufacturers.

In terms of the TCIDP exporters of certain textiles and clothing receive a rebate on import duty paid if the products are re-exported. Various requirements must be met before such a rebate will be allowed.

The TCIDP is the successor of the Duty Credit Certificate Scheme (DCCS) which came to an end on 1 April 2005. The TCIDP extended the initial incentive scheme (with amendments) until 1 April 2007. The TCIDP has been continued on an ad hoc basis since then. Since the scheme legally lapsed, clothing and textile exporters could not plan for the future due to legal uncertainty regarding exports under the scheme. This has now been changed by the South African government's extension of the scheme.

The TCIDP worked on a basis whereby exporters earned credits which could be traded. It is argued that the fact that it could be traded to retailers, for instance, defeated the object of the incentive scheme as other beneficiaries benefited than those intended. However the practice of selling these duty credit certificates to retailers was limited under the TCIDP.

For further information on the products and conditions applicable, kindly contact Rian Geldenhuys.