The South African government will remove the luxury excise duty on smartphones under R2,500 effective April 1, 2025, to enhance digital inclusion for low-income households. This measure comes as the nation prepares to discontinue 2G and 3G networks by the end of 2027, aiming to transition towards faster network technologies. Communications Minister Solly Malatsi supports the proposal as a means to reduce device costs for consumers.
The South African government has announced the removal of the luxury excise duty on smartphones priced below R2,500, effective from April 1. This decision aims to promote digital adoption among low-income households, as stated by the national treasury. Presently, a 9% ad valorem excise duty applies to smartphones.
The treasury indicated that starting April 1, 2025, this tax will only apply to smartphones costing more than R2,500 at the time of export to the country. This proposal intends to enhance affordability for lower-priced smartphones and support digital inclusion efforts.
This initiative coincides with the government’s plan to terminate 2G and 3G networks by December 31, 2027, in order to utilize those radio frequencies for advanced 4G/LTE and 5G technologies. Critics warn that phasing out these older networks could widen the digital divide, especially among low-income consumers in rural areas who may struggle to afford newer smartphones.
Communications Minister Solly Malatsi has previously noted that the existing excise duties significantly inflate smart device costs, and he is currently in discussions with the treasury to reduce these.
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In conclusion, the South African government’s decision to eliminate the luxury tax on lower-priced smartphones aims to improve digital access for low-income households. The phased approach towards excise duties, combined with the upcoming shutdown of older mobile networks, reflects a commitment to fostering digital inclusion while acknowledging the challenges faced by disadvantaged consumers. This initiative is a strategic move towards enhancing smartphone affordability and facilitating access to modern communication technology.
Original Source: techcentral.co.za
