TV and monitor tax has to go

Earlier this year (2011) the South African Revenue Service (SARS) reinstated a 7% ad valorem import duty on monitors that was scrapped in 2004.

If any monitor, including TVs, has a side exceeding 45cm in length the 7% tax is levied in addition to a 25% import duty.

David Kan, CEO of Mustek, explained that this means any widescreen monitor with a 16:9 aspect ratio and a diagonal larger than 20.7 inches gets taxed.

Previously Kan indicated that the tax could be avoided legally, but this doesn’t seem to be an option – all monitors are taxed based on their size irrespective of whether they’re TVs or not.

Devices manufactured locally receive a rebate however, and Samsung previously told MyBroadband that TVs do have a potential price advantage as they are manufactured locally while monitors are not.

Scott Lee, IT marketing product manager at LG Electronics South Africa also said that TV manufacturers produce TVs locally and import monitors, providing TVs with a tax benefit over montiors.

However, Kan said that South Africa’s local TV assembly is a “screwdriver industry” which doesn’t create a lot of jobs and those that are created offer low pay.

Kan said he doesn’t understand why the Department of Trade and Industry (DTI) protects the local TV assembly industry with these taxes when there is no local content in the industry at all. He also argued that TV assembly is a lot simpler than the assembly of a personal computer (PC).

“Why does the DTI not levy taxes on complete PC importation?” Kan asked. “The spirit of levying import duty is to protect the local industry for a period, not forever,” Kan said. “I think the DTI should cancel taxes on complete TV importation.”

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TV and monitor tax has to go