By Hadiza Mohammed
South Africa’s government has proposed to remove the luxury excise duty on smartphones worth below 2,500 rand (136.37 dollars) from April 1.
The National Treasury said on Wednesday that the initiative was to support digital adoption for low-income households.
Currently, so called ad valorem excise duties on smartphones are charged at a rate of nine per cent.
“Government proposes that from April 1, this duty rate be applied only to smartphones with a price paid greater than 2,500 rand at the time of export to South Africa,’’ treasury said in its budget statement.
This proposal will “enhance smartphones affordability at the lower end of the price spectrum and support efforts to promote digital inclusion for low-income households,” it said.
The move came as South Africa plans a total shutdown of 2G and 3G networks by Dec. 31, 2027 to free up radio waves for faster 4G LTE and 5G networks.
Critics of the plan had argued that phasing 2G and 3G networks risked exacerbating the digital divide as many low-income consumers, particularly those in remote areas, may not afford newer smartphones designed for faster networks.
Communications Minister Solly Malatsi told Reuters in 2024 that the ad valorem excise duties contribute to the high cost of smart devices, adding that he was in talks with treasury to cut cost ($1 = 18.3330 rand).
(Reuters/NAN)
