Prepare To Be Taxed For Everything You Purchase Online
E-tolls are ridiculous, that much we can all agree on. They exist not to accrue more tax Rands (does not sound as catchy as tax dollars) for use in infrastructure but just as an additional means by which the South African government can extract more money from us because they cannot appropriate funds properly nor can they seem to sue taxpayers’ money effectively.
It seems they’ve found a new way to drain our money by proposing an e-tax on online purchases. In all fairness we are getting to make all these online purchases free of VAT. This means that unlike e-tolls this is an acceptable move from the government given the volume of online purchases made.
- You’ll Be Able To Play (Expensive) PS2 Games On Your PS4 Now | 2 months ago
- Jessica Jones Disempowers Its Male Characters And The Effect Is Refreshing | 2 months ago
- Hell Is 30 000 Deathclaws Tearing Through Boston And It’s Glorious | 2 months ago
- Sony Santa Monica Is Teasing Something Truly Strange | 2 months ago
What makes it hurt is the plummeting value of the Rand which means that imported goods will cost even more.
Earlier today the department published a document calling for public comment for its proposed regulation of digital services.
“The net result is that the local consumers can buy imported digital products without paying VAT. This outcome not only places local suppliers of digital services at a competitive disadvantage (compared to suppliers from abroad) but also results in a loss of revenue for the fiscus,” the document says.
Here’s a list of what could be subject to tax:
- distance teaching programmes;
- educational webcasts;
- internet-based courses;
- internet-based education programmes; or
Games and games of chance
- internet-based games, including any electronic game or multiplayer role-playing game;
- interactive games, such as games of chance, where the result is influenced by the skill of the player; and
- electronic betting or wagering.
Information system services
Internet-based auction service
Which refers to technical support relating to
- information systems;
- information system services; and
- e-books, which means any digitised content of any book or electronic publication;
- films, which means any broadcast, documentary home-made video, live streaming performance, movie, music video, program, television series, or video
- images, which means any desktop theme, photographic image, pictorial image, or screensaver,
- music, which means any audio clip, broadcast jingle, live streaming performance, ringtone, song, or sound effect,
- software, including apps, system software, or plugins, and any update to these programs.
Any subscription service to:
- information system services;
- social networking services;
- web applications; or
- web series.
That’s a lot of things but essentially anything you purchase online will be slapped with a 14% tax.
“There’s a misunderstanding or misperception of the part of many policymakers. When they discuss mobile penetration, there’s this idea that mobile penetration has reached 60%, 70% 80% – 90% in some countries therefore the work needed to stimulate growth is finished at now the focus should be on milking the industry for tax revenues and what not,” Peter Lyons, director of Public Policy Africa Middle East at the GSM Association told News24.
He added that governments were short-sighted if they considered the digital economy as an easy way to extract money from consumers.
“Governments and those within governments who have an interest in positioning themselves between the mobile sector and the economy – we will see more of this kind of discussion; in some countries there’s a kind of nostalgia for the days of telecom monopolies.”
While the South African government may not be repeating its ongoing e-toll mistake with e-tax, Lyons is no doubt spot on in assessing the misguided aims behind e-tax.
I’m no fan of economics or anything involving finance, tax, wallpaper, other boring aspects of life so my opinion on this is limited. However, it is very clear that with the state of our currency and a new tax imminent, expect the price of games to go up. In fact, expect the price of a lot of things to go up.
It wouldn’t be a surprise of PS4 games start pushing R1000 soon. We’ve already seen local prices for the console itself shoot up.
You can find the original document here.
To sum it up, there are dark times ahead for you and your wallet.