South Africans voting with their wallets — refuse to pay for TV licences
Despite implementing cost-cutting efforts, including job cuts and office closures, the South African Broadcasting Corporation (SABC) is expected to report a R1 billion net loss, City Press reports.
A significant contributor to the public broadcaster’s poor financial performance is its failure to collect TV licence fees in the country, with evasion rates reaching 82% in 2022.
It would likely be profitable if it could collect TV licence fees from all of its customers.
According to its 2022 annual report, the SABC has a database of 10.5 million registered TV licence holders, meaning around 8.6 million didn’t pay their fees.
With the annual fee set at R265, non-payment cost the SABC R2.28 billion in lost revenue in 2022.
The SABC’s new board chairperson Khathu Ramukumba allegedly revealed the expected loss during a meet-and-greet session with staff members at the end of May.
Citing an anonymous source, City Press reported the broadcaster’s board is displeased with management’s reckless approach to running the business.
“The chairperson told management that their mandate is to turn around the SABC’s fortune,” it quoted the source as saying.
“He told them that this board will not fail because of their recklessness.”
SABC Group CEO Madoda Mxakwe told the paper he doesn’t know where the figure comes from because the Auditor-General has yet to complete its review of the SABC’s financials.
Mxakwe is set to leave the SABC at the end of June.
The SABC has been struggling financially for some time. Mxakwe joined the broadcaster in 2018 after it reported a net loss of R1.2 billion.
In May 2022, the broadcaster revealed that it had lost R600 million in two years, which it attributed to a declining audience and rising TV licence fee evasion rates.
Regarding its failure to collect TV licence fees, the SABC reported that 81.7% of its customers didn’t pay their TV licence fees in 2022.
TV Licence fee delinquency appears to have peaked in 2020 when evasions rose to 81%, and revenue generated from fee collections declined to R788 million.
The SABC’s reported TV licence evasion rates between 2018 and 2022 were as follows:
- 2018: 72%
- 2019: 69%
- 2020: 81%
- 2021: 82% (82.1%)
- 2022: 82% (81.7%)
Several entities, including the African National Congress (ANC), the Organisation Undoing Tax Abuse, and the SABC itself, support replacing the current TV licence fee with a household tax.
The tax would be technology-neutral and based on whether a property can access SABC services.
Essentially TV licences would become a ring-fenced public broadcasting tax that households and businesses must pay regardless of whether they watch the broadcaster’s content or own a TV.
The concept is similar to Germany’s Rundfunkbeitrag (broadcasting fee) — an €18.36 (R374.92) monthly payment that helps fund public broadcasting.
In addition to a household levy, the SABC has also argued in favour of the country’s dominant pay-TV provided — in this case DStv operator MultiChoice — collecting levies on its behalf.
Although it supports the idea of a technology-neutral levy, MultiChoice baulked at the SABC’s proposal that it should help collect payments.
“Our position is very clear. We can’t be held responsible for collecting money on behalf of a government entity,” said MultiChoice group CEO Calvo Mawela.
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