Another Blow to the Google and Apple Online Stores in South Africa

LazyLion

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They are taking all of South Africans money out of S. Africa................who is bringing it back?

Fair Exchange of goods and value. The money is not going into a black hole. It is being exchanged for something of equal value.
 

sox63

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Because it is VAT, and at no point are the government involved in adding value in the supply chain. Other ancillary values derived from things like shipping, clearance, transport etc are already built into the costings or recovered through duties payments. There is no need for VAT payments tobe made. This is taking consumption alone and stripping away all of the other motives of VAT. It is quite pathetic imo...

To play devil's advocate...

The licencing of the ISPs?
 

Garson007

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Step in the right direction. No reason why they shouldn't be paying tax.
 

EtienneK

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How will they enforce this? Will they start blocking sites that are not registered for VAT in SA? If so, Hello Internet Censorship?
 

DJ...

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To play devil's advocate...

The licencing of the ISPs?

Government are already paid in the supply chain for that already, by the user. In that case we'd have to tax all sites visited...
 

LazyLion

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You guys are not making a fair comparison here...

Other countries don't have all the other stupid Film And Publication Board hurdles to jump through, so we are already at a disadvantage.
This only make it even worse.
There will be no collecting of VAT from these guys, because they will simply just turn around and refuse to do business with us.
It will not be economically or practically viable for them in such a small market.

So it's not a case of oh goody, let's tax them. It's rather a case of... SA loses out again.
 

sox63

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Government are already paid in the supply chain for that already, by the user. In that case we'd have to tax all sites visited...

Would the vat already paid in the supply chain be for access to the internet only? Therefore any further transactions can be open to VAT?
 

DJ...

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Clearly Pravin knows something that we don't. Evidently there is going to be a massive push by the likes of Apple and Google into our market, and he is trying to level the playing field somewhat with the local distributors. Now that I don't have all that much of an issue with (I do to some extent but that's another argument), but you cannot do so to the detriment of the consumer and the smaller players in the market. There are other tax options available to protect the local industry without penalising everyone...
 

Garson007

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How will they enforce this? Will they start blocking sites that are not registered for VAT in SA? If so, Hello Internet Censorship?
No, but they would probably be sued or something - or an agreement will be made with the banks.
 

LazyLion

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Would the vat already paid in the supply chain be for access to the internet only? Therefore any further transactions can be open to VAT?

You are not understanding the concept of "Value Added Tax".
If nobody in South Africa added value to the product, how can it be taxed in that manner?
 

garp

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To all the sheeple who say "well it's the law", firstly, being legal is not the same as being right or fair, and secondly, these are companies operating globally on the Internet - ultimately any consideration of which legal jurisdiction they operate in is merely an arbitrary bureaucratic agreement to keep the money grabbing civil servants at bay. And if you think paying tax is a good thing, consider how much benefit YOU proportionately get from the taxes on the fruits of your labour compared to the entitled masses who contribute less than nothing (some of whom even have nice estates in Nkandla).
 

Garson007

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Clearly Pravin knows something that we don't. Evidently there is going to be a massive push by the likes of Apple and Google into our market, and he is trying to level the playing field somewhat with the local distributors. Now that I don't have all that much of an issue with (I do to some extent but that's another argument), but you cannot do so to the detriment of the consumer and the smaller players in the market. There are other tax options available to protect the local industry without penalising everyone...
I'm pretty sure that it's just about selling a product or service in South Africa.
 

DJ...

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Would the vat already paid in the supply chain be for access to the internet only? Therefore any further transactions can be open to VAT?

Makes no difference within the context of the example you provided. There is no difference as far as the ISP is concerned whether you're using data for a transaction or simply for browsing. If you want to build VAT in for internet consumption, then it cannot be isolated to transactions, or it is simply a transaction/consumption tax, and not an actual tax based on value derived from a service rendered...
 

JStrike

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You guys are not making a fair comparison here...

Other countries don't have all the other stupid Film And Publication Board hurdles to jump through, so we are already at a disadvantage.
This only make it even worse.
There will be no collecting of VAT from these guys, because they will simply just turn around and refuse to do business with us.
It will not be economically or practically viable for them in such a small market.

So it's not a case of oh goody, let's tax them. It's rather a case of... SA loses out again.

If they can't pay VAT in SA like every other company here, then they can go ahead and refuse to do business with us.
They don't deserve special treatment
 

DJ...

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No, but they would probably be sued or something - or an agreement will be made with the banks.

International clearance is immediate between banks. They can limit their transactional abilities to an extent, but new payment gateways make this quite difficult to enforce. They'd have to go the legal route, in which case this is going to cost us more than we ever derive out of it, as trying an international case like this would cost millions...
 

LazyLion

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If they can't pay VAT in SA like every other company here, then they can go ahead and refuse to do business with us.
They don't deserve special treatment

OK, well I can see how sitting on a dust pile might be fun for you... you are only aware of Apple Stuff.
But to the rest of us that are aware of everything else in the world, we would like to have access to content... preferably legally and preferably cheap.
 

EtienneK

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No, but they would probably be sued or something - or an agreement will be made with the banks.

How are they going to sue companies that have no assets in South Africa, like Valve with Steam?

I don't think they thought this one through...
 

DJ...

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I'm pretty sure that it's just about selling a product or service in South Africa.

You really need to explain yourself better. Posting vague statements like this serves no purpose.

Yes, I'm well aware that this is about selling products and services. There was no need for an explanation. Or are you attempting to imply that there is no ulterior motive? In which case I refer you to taxation as a whole, which is a driver to manipulate market movements, cashflows, generate income and the protection of local business.

I'd hazard a guess at this being the result of studies showing a consumer propensity towards online transactions and a diminished e-presence to meet the market. As opposed to a thumb-suck "let's add some VAT over there" result...
 
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