The South African government plans to remove luxury excise duties on smartphones under R2,500 starting April 1, 2025, to promote digital inclusion for low-income households. This change coincides with the planned shutdown of 2G and 3G networks by December 2027, raising concerns regarding the digital divide for those unable to afford new devices.
The South African government will eliminate luxury excise duties on smartphones priced below R2,500 starting on April 1, 2025, as part of an initiative to foster digital adoption among low-income households. The current ad valorem excise duty rate of 9% will only apply to smartphones exceeding this price point at the time of export to South Africa.
This change aims to improve smartphone affordability, particularly in the lowest price categories, and to promote digital inclusion for underprivileged communities. Additionally, it coincides with South Africa’s objective to phase out 2G and 3G networks by December 31, 2027, paving the way for the introduction of faster 4G/LTE and 5G networks.
Critics have expressed concerns that shutting down 2G and 3G networks could worsen the digital divide, especially for low-income users in rural areas who may not afford the newer smartphones necessary for faster network capabilities. Communications Minister Solly Malatsi has mentioned that the high costs of smart devices are partially due to these excise duties and has been in discussions with the treasury regarding potential cuts.
The South African government’s proposal to abolish luxury taxes on lower-priced smartphones aims to bolster digital access for economically disadvantaged households. This initiative is particularly relevant as the country prepares to retire older network technologies while facing criticism about accessibility challenges. Engaging in dialogue about reducing these taxes demonstrates a commitment to addressing affordability issues in the smartphone market.
Original Source: techcentral.co.za
