[ad_1]
Government proposes no ad valorem excise duty on lower value smartphones, in a move to help boost connectivity.
Budget 2025: Government has proposed “no ad valorem excise duty on lower value smartphones” be applied, as of 1 April.
This was highlighted in the South African Revenue Service tax pocket guide, which provides a summary of the most important information relating to taxes, duties and levies for 2025/26.
Ad valorem duties are the taxes levied on commodities as a certain percentage of their value, as defined in the National Treasury budget review document.
Such a move means smartphones with a price tag less than R2 500 will have no excise duty applied when they are exported to SA.
The 2025 Budget review reads: “Currently, ad valorem excise duties on smartphones are charged at a flat rate of 9%. To enhance smartphone affordability at the lower end of the price spectrum and support efforts to promote digital inclusion for low-income households, government proposes that as of 1 April 2025, this duty rate be applied only to smartphones with a price paid greater than R2 500 at the time of export to South Africa.”
With over 3.1 billion citizens yet to come online, the expense of smartphones has widely been touted as the biggest barrier to connectivity.
In 2023, GSM Association (GSMA) Sub-Saharan Africa head Angela Wamola told ITWeb that despite Sub-Saharan Africa being the fastest-growing mobile region in the world, the availability of affordable devices remains a hurdle.
GSMA projections show 50% of the Sub-Saharan Africa population will have a mobile subscription, or use mobile services by 2025. However, only 22% of the population access 3G and 4G internet, meaning 78% of the population is offline, Wamola revealed.
Furthermore, analysed data traffic shows that millions of South Africans still rely on 2G and 3G, which does not bode well for digital connection ambitions.
Last month, the Department of Communications and Digital Technologies, led by minister Solly Malatsi, engaged the GSMA and World Bank as part of efforts to spark debate on driving digital inclusion through affordable smartphones.
Malatsi has been a long-time advocate of affordable smartphones, prioritising the removal of obstacles to connectivity, which includes reducing the cost of smartphones.
The budget review document is in conjunction with finance minister Enoch Godongwana’s revised budget speech tabled today, after last month’s historic postponement, due to opposition to a 2% value-added tax (VAT) increase.
In the latest amendments, it is shown that government has decided to raise additional tax revenue, by introducing measures that include increasing the VAT rate by 0.5% points in each of the next two years and not adjusting personal income tax brackets for inflation.
[ad_2]
Source link
