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While the definition of the reference price left room for discretion, in practice, the price of an American or European product was widely used.
Prior to 1990 there were four types of export subsidy: (i) an input compensation, whereby exporters could receive half the cost of protection afforded to imported inputs; (ii) a value-added compensation, whereby exporters could receive 10 percent of the value added of export sales; (iii) a marketing development scheme; and (iv) a marketing allowance provided under the Income Tax Act. The GEIS replaced the first two.
The GEIS stipulated that for manufactures to be eligible for a tax-free cash payment or a promissory note, the local content had to be at least 35 percent.
Motor vehicle imports comprised 14 percent of total imports in 1994, while textiles comprised 4 percent of total imports, with leather products, footwear, and clothing comprising 1 percent, 1 percent, and 0.5 percent, respectively.
See Green Paper on Customs Tariff Policy with regard to Agricultural Products, 1996, p. 20.
These figures do not include import surcharges.
The rebate permits the duty-free importation of vehicles and components equal to the local content value of motor vehicles and components exported. The rebate is transferable. In some cases the rebate induced a domestic producer to export components in exchange for imports of CBUs.
The Banana Board was abolished in March 1993; the Chicory, Dried Beans, and Rooibos Tea Boards in September 1993; the Potato Board in December 1993; and the Mohair Board in January 1994.
At a price of R 5 per kilogram, this specific duty would imply a tariff of 35 percent. The evasion takes place, inter alia, by qualifying meat products as processed meat products.
Under the GEIS, exports were categorized into four types depending on the degree of processing: (a) primary products (e.g., logs, mineral products), (b) beneficiated primary products (e.g., saw logs, billets), (c) material intensive products (e.g., planed planks, sheet metals), and (d) manufactured products (e.g., furniture, steel cabinets). The higher the level of processing, the larger the subsidies became. In April 1995, the Government abolished GEIS benefits on products listed in category (a) and reduced subsidies for products in category (c) by reclassifying them as category (b).