SA digital downloads get new customs tax [April Fools]

SARS has announced plans for a new customs tax to be levied against the data downloaded for digital purchases made with foreign stores.

This follows news of the revised implementation date of the SA National Treasury electronic services regulations, coming into effect on 1 June 2014.

In terms of the new SA National Treasury electronic services regulations, the VAT will apply to any supplier of electronic services from an “export country” to any resident in South Africa, or where payment is made from a local bank.

This means gaming products and services are affected, such as subscriptions to online games and digital game purchases. Movies, films, and music purchases and subscription services will also be affected.

We have confirmed that from 1 June 2014, the new 14% VAT tax will be implemented across popular services Steam, PSN, and Xbox Live, resulting in a 14% markup on the previously standard prices.

“What we’ve noticed is very positive growth of digital software purchases over the last four or five years, especially video games. While physical copies of games have increased the amount of units sold and shipped, our e-business section within SARS have also kept an eye on the e-commerce side of the industry,” said SARS Customs and Excise spokesperson Undida Isidenge in a press statement.

“Despite the fact that these are bought through digital platforms, that data that is transferred is still coming from overseas sources. That is a lot of revenue that has not been taxed with the relevant duties applied.”

The free ride is over. When you import physical goods, you pay import duties VAT. These levies go towards building our country and strengthening our economy. People purchasing luxury items like games need to contribute as well. There have been millions lost in unpaid duties and taxes something that SARS needs to address,” said Isidenge.

“Customs duties are imposed by the Customs and Excise Act 91 of 1964. They are levied on imported goods with the aim of raising revenue and protecting the local market. With the new Electronic Services Regulations that are in effect from June 1, 2014 as precedent, we have been able to amend the Customs and Excise Act No. 91 of 1964. As such, we have made provision to charge for Ad Valorem products as defined by the act.”

“By charging customs duties and VAT on digital goods, the gaming community can finally give back to South Africa for being allowed the freedom to enjoy their little hobby,” said Isidenge.