DStv and Netflix Tax Still Under Consideration as Govt Seeks SABC Funding Solutions

DStv and Netflix Tax Still Under Consideration

The South African government is actively exploring new ways to secure financial stability for the South African Broadcasting Corporation (SABC). One of the key proposals under consideration is a streaming levy on both local and international platforms such as DStv and Netflix. This was confirmed by Communications and Digital Technologies Minister Solly Malatsi during a recent parliamentary Q&A session.

Why Is a Streaming Levy Being Considered?

The current TV licence system has proven to be ineffective, with low compliance rates, high collection costs, and inflation reducing its sustainability. According to Malatsi, the streaming levy would provide an automatic and modernised method of funding for the SABC. This approach could stabilize the broadcaster’s revenue stream and ensure compliance.

Under this proposal, households that have already paid their TV licences would be exempt from the levy. However, consumers may face increased subscription costs as streaming services could pass on the levy to their users.

Other Funding Models Under Consideration

While the streaming levy is one option, the government is also evaluating alternative funding solutions:

1. Household or Business Levy via SARS
   • This model would involve a mandatory levy collected by the South African Revenue Service (SARS).
   • The revenue would be allocated to an independent SABC fund.
   • While this could reduce collection costs and provide stable funding, it may face public backlash as an additional tax burden.
2. Conditional Grant from the National Treasury
   • This short-term measure would provide immediate relief to the SABC.
   • However, the government sees this as unsustainable for long-term financial stability.
3. Loan Guarantee for the SABC
   • The SABC has requested government support in securing an overdraft facility for critical infrastructure investment.
   • While this would offer financial flexibility, the broadcaster would still be responsible for repaying the loan, potentially adding financial strain.

To assess the viability of these options, Malatsi has approved a feasibility study to determine the most sustainable funding model for the SABC. The study will evaluate current revenue streams, consider new funding mechanisms, and engage stakeholders for input.

The SABC’s TV Licence Problem

The SABC has been struggling due to widespread TV licence non-payment. Many South Africans have resisted paying their TV licences, effectively staging a quiet tax revolt.

Key statistics:

• Only 13% of registered TV licence holders pay their fees.
• 7.5 million TV licence accounts have been handed over to debt collectors.
• Debt collection efforts recovered R139 million between April and September 2024, a R41.7 million increase compared to the previous period.

Efforts to Improve TV Licence Compliance

To address these challenges, the SABC has introduced several initiatives:

• Loyalty and Rewards Programme: Launched in December 2023, this program incentivizes payments with rewards like vouchers and airtime.
• GIS Data Mapping: Geographic Information System (GIS) data is being used to identify unlicensed households and send targeted payment reminders.
• Credit Profile Trace Alerts: Defaulters’ credit profiles are flagged to encourage engagement and debt settlement.
• Data Analytics for Targeted Collections: The SABC is using analytics to design personalized collection strategies based on location, age, and payment patterns.

No Official Decision Yet

Despite speculation, Minister Malatsi’s spokesperson, Kwena Moloto, clarified that the government is still exploring various funding models. No formal proposals have been adopted at this stage.

What This Means for Consumers

If the government proceeds with the streaming levy, DStv and Netflix, and other platforms may increase subscription prices to compensate for the tax. Similarly, a SARS-collected levy would mean additional costs for households and businesses.

For now, the future of SABC funding remains uncertain. As discussions continue, South Africans will have to wait for the feasibility study’s findings to determine which model—if any—will be implemented.