South Africa’s main telecommunications operators have lauded finance minister Enoch Godongwana’s announcement that luxurious duties on fundamental smartphones can be scrapped.
The choice, which was championed by communications minister Solly Malatsi, is geared toward bridging the digital divide and making it simpler for lower-income shoppers to maneuver to 4G and even 5G gadgets forward of the deliberate shutdown of 2G and 3G networks in South Africa.
At present, advert valorem excite duties on all smartphones are imposed at a fee of 9% of the price of the gadget.
“Authorities proposed that as of 1 April 2025, this responsibility fee be utilized solely to smartphones with a value paid better than R2 500 on the time of export to South Africa,” nationwide treasury mentioned in its funds assertion on Wednesday.
This transfer will “improve smartphone affordability on the decrease finish of the value spectrum and help efforts to advertise digital inclusion for low-income households”, treasury mentioned.
Nomvuyiso Batyi, CEO of the Affiliation of Comms & Know-how (ACT) – an trade physique that represents South Africa’s six largest telecommunications operators – informed TechCentral that the proposal to exempt low-cost smartphones from the 9% advert valorem excise responsibility is a “important step ahead in driving digital inclusion and guaranteeing that extra South Africans – particularly these in low-income households – can entry reasonably priced, internet-enabled gadgets”.
Barrier to connectivity
“ACT has been on the forefront of advocating for coverage reforms that help widespread digital adoption. Over the previous few years, we have now actively engaged with authorities, authentic tools producers and different stakeholders to push for the elimination of extreme taxes on sensible gadgets, which have lengthy been a barrier to connectivity,” Batyi mentioned.
“This proposed tax adjustment is a direct results of these efforts and aligns with our broader mission of constructing digital providers accessible to all.”
She mentioned the timing of Godongwana’s announcement is “important” given the trade’s “ongoing transition away from legacy 2G and 3G networks”.
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“For the digital financial system to achieve success, South Africans will need to have entry to reasonably priced 4G- and 5G-enabled smartphones. This tax exemption will make a tangible distinction in attaining that objective and guaranteeing that nobody is left behind within the digital financial system,” Batyi mentioned.
Charles Molapisi, MTN South Africa’s CEO, informed TechCentral that the transfer is a “constructive step in direction of bridging the digital divide and making important applied sciences extra accessible to a bigger phase of South African society”.
“By slicing the luxurious tax, extra clients who nonetheless depend on older applied sciences reminiscent of 2G and 3G could have the chance to afford fundamental 4G smartphones,” Molapisi mentioned.
A Vodacom spokesman mentioned through e-mail that the transfer by nationwide treasury – supported by minister Malatsi – is “sincerely welcomed”.
“Eradicating the advert valorem taxes for lower-cost smartphones is a big step in direction of bettering the affordability of smartphones for those who have restricted financial means and is predicted to have a significant influence on 4G gadget adoption.
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“The following step in helping clients transition to 4G terminals is for presidency to evaluate the extent to which VAT is levied on smartphones. This may help to additional cut back the affordability hole.”
The Vodacom spokesman mentioned Wednesday’s announcement is a “important step in direction of finally sunsetting legacy applied sciences” however different points of the transition to new platforms should be addressed, together with changing internet-of-things gadgets which might be depending on older networks. – © 2025 NewsCentral Media
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