This is how South Africa's "Netflix tax" could work

Hanno Labuschagne

Hanno Labuschagne

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This is how South Africa's "Netflix tax" could work

South Africa is considering implementing a new digital tax on services such as Netflix and Facebook that would require these companies to pay tax on their local operations to the South African government.

The idea has been brought forward by the Parliamentary Budget Office and stressed as a crucial step by the President's Fourth Industrial Revolution (4IR) commission, but there is currently no proposed legislation to this effect.

However, a guideline for the drafting of this legislation for African countries has been published, giving an idea of what the legislation could look like.
 
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markings

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How come it is not possible to have a digital services VAT rate of e.g. standard VAT rate + 3%? As it applies to international companies everything is already in place. Locally we already have 2 VAT rates 15% and 0%. It shouldn't be a problem for the businesses which can claim the VAT to add a third one.
What could be simpler and easier than this?
VAT is directly related to digital services revenue, which is what they are looking for.
 
Sinbad

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markings said:
How come it is not possible to have a digital services VAT rate of e.g. standard VAT rate + 3%? As it applies to international companies everything is already in place. Locally we already have 2 VAT rates 15% and 0%. It shouldn't be a problem for the businesses which can claim the VAT to add a third one.
What could be simpler and easier than this?
Click to expand...
**** off with your bright ideas. We are already overtaxed with no benefits.
 
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boboudts

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Why not just ban these "foreign, colonial wmc enterprises" and invent your own our people's "netflix", comrades?...phht
 
friedpiggy

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boboudts said:
Why not just ban these "foreign, colonial wmc enterprises" and invent your own our people's "netflix", comrades?...phht
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That is what the SABC is trying to do if I read the reports correctly. Think its called iPlayer or some k*k like that.
 
FaSMaN

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Honestly this is getting beyond rediculous , just let the people enjoy digital content , as stated above it's allready including VAT , so the goverment is already making money from it, hell if the goverment really wants more tax, fine, get rid of income tax and push VAT up to a acceptable level to compensate, that way everyone pays tax , instead of trying to over tax selected services and having those who pay income tax pay even more!
 
system32

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Found the following on the net which is relevant here:
@swillden wrote "Taxing corporations is stupid, and evil.

I don't say this because I want to make corporations happy, I say this because corporate taxes are inherently foolish. Corporations are legal fictions that combine the financial resources of many owners and combine and direct the labor of many people. They're not people (silly court rulings aside) and it's dumb to treat them as such.

More concretely, the fact is that corporations never actually pay taxes, only people pay taxes. When you demand cash from a corporation, it's just a cost of doing business and one that they will pass on. They can always pass it on because all of their competitors are subject to the same taxes (well, some are big and smart enough to be able to legally avoid taxes... so taxing corporations does yield a net advantage to megacorps who will always, always be able to arrange to pay less on a percentage basis than their smaller competitors).

Where do they pass it? It varies. Obviously the fans of corporate taxation would love it if the corps would pass it on to their investors. And they could actually do that... but that is the very last place they'll pass it. They might sometimes have to do it, but the core goal of corporations is to maximize shareholder value, so they don't want to let the cost land there. Another place they can and do pass it is to their employees, in the form of lower wages. They also try to pass it to their suppliers, in the form of lower prices paid for whatever they have to buy. And finally, and ultimately, they pass it to their customers, in the form of higher prices.

But what matters less than specifically where they pass it is the fact that it's the corporations themselves who decide how to allocate those costs, subject only to some competitive constraints. It's wrong and foolish of legislators to allow corporate boardrooms to decide where those taxes land. Legislatures should decide who pays the taxes.

Moreover, I said that corporate taxation was evil, not just stupid. How is it evil? Simple: Because to lawmakers and voters it looks like "free money". Voters are happy for lawmakers to tax corporations rather than people because their Big Evil Corps. But as I pointed out above, that's a fiction. All of those taxes do ultimately land on voters, in their roles as customers, employees, suppliers and investors. But the voters never see the amounts they're paying.

By making those taxes invisible to the voters, corporate taxes subvert democracy. They make it impossible for taxpayers to accurately assess how much they're paying for the value they're getting from their government. This is evil.

Corporate tax rates should be zero. Everywhere. Instead, you should tax incomes and capital gains in nice, progressive structures that get the money from the people who can afford it, and not from the people who can't. Note that the people who can't afford it is where corporations most like to pass the taxes, because they're least able to defend themselves.

Note that I'm talking about corporate income taxes. It's fine to tax things that corporations do, rather than their profits (which are really the profits of their shareholders, note). For example, it's fine to levy carbon taxes on corporations that burn fossil fuels. It's fine to tax corporations that operate fleets of vehicles for the miles their vehicles put on the roads. And so on. If the goal is to deter the use of some resource, or to offset the societal impact of some process, that's sensible and good, not stupid and evil."
 
Mr Justice

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system32 said:
Found the following on the net which is relevant here:
@swillden wrote "Taxing corporations is stupid, and evil.

I don't say this because I want to make corporations happy, I say this because corporate taxes are inherently foolish. Corporations are legal fictions that combine the financial resources of many owners and combine and direct the labor of many people. They're not people (silly court rulings aside) and it's dumb to treat them as such.

More concretely, the fact is that corporations never actually pay taxes, only people pay taxes. When you demand cash from a corporation, it's just a cost of doing business and one that they will pass on. They can always pass it on because all of their competitors are subject to the same taxes (well, some are big and smart enough to be able to legally avoid taxes... so taxing corporations does yield a net advantage to megacorps who will always, always be able to arrange to pay less on a percentage basis than their smaller competitors).

Where do they pass it? It varies. Obviously the fans of corporate taxation would love it if the corps would pass it on to their investors. And they could actually do that... but that is the very last place they'll pass it. They might sometimes have to do it, but the core goal of corporations is to maximize shareholder value, so they don't want to let the cost land there. Another place they can and do pass it is to their employees, in the form of lower wages. They also try to pass it to their suppliers, in the form of lower prices paid for whatever they have to buy. And finally, and ultimately, they pass it to their customers, in the form of higher prices.

But what matters less than specifically where they pass it is the fact that it's the corporations themselves who decide how to allocate those costs, subject only to some competitive constraints. It's wrong and foolish of legislators to allow corporate boardrooms to decide where those taxes land. Legislatures should decide who pays the taxes.

Moreover, I said that corporate taxation was evil, not just stupid. How is it evil? Simple: Because to lawmakers and voters it looks like "free money". Voters are happy for lawmakers to tax corporations rather than people because their Big Evil Corps. But as I pointed out above, that's a fiction. All of those taxes do ultimately land on voters, in their roles as customers, employees, suppliers and investors. But the voters never see the amounts they're paying.

By making those taxes invisible to the voters, corporate taxes subvert democracy. They make it impossible for taxpayers to accurately assess how much they're paying for the value they're getting from their government. This is evil.

Corporate tax rates should be zero. Everywhere. Instead, you should tax incomes and capital gains in nice, progressive structures that get the money from the people who can afford it, and not from the people who can't. Note that the people who can't afford it is where corporations most like to pass the taxes, because they're least able to defend themselves.

Note that I'm talking about corporate income taxes. It's fine to tax things that corporations do, rather than their profits (which are really the profits of their shareholders, note). For example, it's fine to levy carbon taxes on corporations that burn fossil fuels. It's fine to tax corporations that operate fleets of vehicles for the miles their vehicles put on the roads. And so on. If the goal is to deter the use of some resource, or to offset the societal impact of some process, that's sensible and good, not stupid and evil."
Click to expand...
Taxing people is stupid when the government can just print more money like Zimbabwe.
 
dabbler

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I have a small Toyota Auris and the license disk renewal this year is R606. Everything is being taxed more and more. next thing is they will be taxing our tax.
 
Lupus

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dabbler said:
I have a small Toyota Auris and the license disk renewal this year is R606. Everything is being taxed more and more. next thing is they will be taxing our tax.
Click to expand...
The Toyota Auris is 1300+kg that's not small. I paid R750 for my Cruze last year. My Clio was R450 as it's only 960kg
 
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