South Africa scraps luxury tax on affordable smartphones
The South African government will eliminate the luxury excise duty on smartphones priced below R2,500, effective April 1, 2025, to promote digital adoption among low-income households.
Read: Microsoft gears up for Xbox handheld, reportedly built by PC partner
Currently, these “ad valorem” excise duties are levied at a 9% rate.
“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,” Treasury stated in its budget statement.
This move aims to “enhance smartphone affordability at the lower end of the price spectrum and support efforts to promote digital inclusion for low-income households.”
The decision coincides with South Africa’s plan to phase out 2G and 3G networks by December 31, 2027, to allocate radio waves for faster 4G/LTE and 5G networks.
See also
Concerns had been raised that the 2G/3G shutdown could widen the digital divide, as many low-income consumers might struggle to afford newer, 4G/5G-compatible smartphones.
Communications Minister Solly Malatsi had previously advocated for the removal of these excise duties, citing their contribution to the high cost of smart devices.
Crédito: Link de origem