Budget 2025: South Africa Removes 9% Ad Valorem Tax on Affordable Smartphones
The relief of smartphone tax: South Africans looking for budget-friendly smartphones will soon enjoy lower prices after the government announced the removal of the 9% ad valorem tax on devices priced at R2,500 or less. This policy change, set to take effect on 1 April 2025, is aimed at making mobile technology more accessible to low-income consumers.
Budget 2025 Brings Relief to Smartphone Buyers
The decision was revealed by Finance Minister Enoch Godongwana in his 2025 Budget Speech on 12 March. The ad valorem tax, previously applied to luxury goods like high-end electronics and vehicles, had made smartphones more expensive in South Africa. The Association of Comms and Technology (ACT) has praised the move, saying it will enhance digital inclusion and help more people access essential mobile services.
Why the Change?
The National Treasury noted that the tax exemption is meant to reduce the cost of entry-level smartphones, particularly for individuals who rely on mobile connectivity for work, education, and communication. With smartphone prices steadily rising over the years, this change ensures that affordable technology remains within reach for millions of South Africans.
What This Means for Consumers
From 1 April 2025, smartphones priced at R2,500 or less will no longer be subject to the 9% ad valorem tax, potentially leading to lower retail prices. This tax cut is expected to boost smartphone sales, support local retailers, and help bridge the digital divide in South Africa.
Industry Reactions
Communications and Digital Technologies Minister Solly Malatsi welcomed the decision, stating that affordable mobile technology is key to South Africa’s digital transformation. Industry experts also believe that lower smartphone prices will encourage more people to connect online, contributing to economic growth and digital literacy.
Final Thoughts
The removal of the smartphone tax for budget devices is a positive step toward greater digital accessibility in South Africa. With technology playing a crucial role in education, business, and daily life, this policy change could benefit millions while driving economic and technological progress.
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