Home Gaming Digital Taxation: It’s happening

Digital Taxation: It’s happening

2 min read
136

nomoney

By now, you’ve all probably heard very much about the news that the government plans to implement taxation on digital purchases made from within South Africa. Yes, your government wants even more of your money. It is unfortunately true, and as of April 1, if government gets its way both physical and digital goods you buy online will be subject to the 14% VAT we already pay on everything.

This includes thing you buy from Google’s play store, Apple’s iTunes, XBox Live’s marketplace, PSN and yes, even Steam – so you best start getting ready to cough up even more for your games and digital services. What? Digital services too? Yup, things like Netflix, Paypal, Unotelly, or whatever other services you pay for will cost you even more. Want to buy an eBook, or book an online course? Yup, that’ll cost you more too.

Here’s a list of everything you’ll be required to pay VAT on:

Educational services
  • distance teaching programmes;
  • educational webcasts;
  • internet-based courses;
  • internet-based education programmes; or
  • webinars,
Games and games of chance
  • internet-based games, including any electronic game or multiplayer role-playing game;
  • interactive games, such as games of chance, where the result is influenced by the skill of the player;
  • electronic betting or wagering.
Information system services
Internet-based auction service
Maintenance services

Which refers to technical support relating to

  • blogs;
  • databases;
  • information systems;
  • information system services; and
  • websites.
Online content
  • e-books, which means any digitised content of any book or electronic publication;
  • films, which means any broadcast, documentary home-made video, live streaming performance, movie, music video, program, television series, or video
  • images, which means any desktop theme, photographic image, pictorial image, or screensaver,
  • music, which means any audio clip, broadcast jingle, live streaming performance, ringtone, song, or sound effect,
  • software, including apps, system software, or plugins, and any update to these programs.
Subscription services

Any subscription service to:

  • blogs;
  • databases;
  • information system services;
  • journals;
  • magazines;
  • newspapers;
  • games;
  • social networking services;
  • webcasts;
  • websites;
  • web applications; or
  • web series.

The only way to implement this realistically, is to have it done automatically by banks when you make purchases, or require that services such as Steam comply with Vat regulation, which means they’d need to be registered VAT vendors. Do you really think all of the international companies you buy from are going to register for that? Not a chance in hell; instead, I suspect it just means we’ll be geofenced off from everything. In the end, it’ll mean you may as well say goodbye to the open market on the internet – and hello to a lot more digital piracy.

Piracy is driven more by ease of access than cost, and if everything’s blocked, it makes sense that media consumers will look elsewhere for that content.

Last Updated: January 31, 2014

136 Comments

  1. Kromas

    January 31, 2014 at 12:21

    Knew this was coming for a while.

    Reply

    • Unavengedavo

      January 31, 2014 at 12:45

      I always though that it was already being done…

      Reply

  2. Super_Bonk

    January 31, 2014 at 12:22

    Not cool

    Reply

  3. Admiral Chief in Vegas

    January 31, 2014 at 12:23

    PLEASE BE APRIL’s FOOL JOKE!!!!

    Reply

    • Hammersteyn

      January 31, 2014 at 12:24

      Lol I saw it too.

      Reply

    • Unavengedavo

      January 31, 2014 at 12:36

      That is not something that I would want as a Bday gift O_o

      Reply

      • Admiral Chief in Vegas

        January 31, 2014 at 12:37

        LOL that explains a lot about you….

        😛

        Reply

        • Unavengedavo

          January 31, 2014 at 12:44

          Meaning what? O_o

          Reply

          • Admiral Chief in Vegas

            January 31, 2014 at 12:47

            Hehehe, you know what I mean. Mr Ice Cream man 😛

          • Unavengedavo

            January 31, 2014 at 13:09

            No I don’t… What does the date of my birth have to do with anything?

          • Admiral Chief in Vegas

            January 31, 2014 at 13:14

            1 April? April fools day? You always posting us horrible things? Eh?

          • General JJ PanGirl

            January 31, 2014 at 13:17

            I hear it’s raining up there by you guys today. Probably from the ANC trying to flush the country down the toilet.

  4. FoxOneZA

    January 31, 2014 at 12:23

    They’ll even tax F2P and every microtransaction with it.

    Reply

  5. Umar Break Dancing Cyborg

    January 31, 2014 at 12:23

    • RinceThis2014

      January 31, 2014 at 12:41

      This.

      Reply

  6. Super_Bonk

    January 31, 2014 at 12:25

    We can all make comments by 20 February. Not that it will make a difference

    Reply

  7. Gavin Mannion

    January 31, 2014 at 12:28

    I can definitely understand the reasoning behind this as we are just throwing money out of the country all the time which only benefits the massive corporations overseas. But unfortunately I don’t think our market is big enough for the vast majority of companies to register for VAT which means they could be sued by the government for tax evasion..

    There must be a better way

    Reply

    • FoxOneZA

      January 31, 2014 at 12:31

      I was thinking the same thing. If the USA can pull it’s investments from emerging economies, why should we fund their governments.

      I would expect government to have some plan on the process would work rather than chasing international e-tailers away.

      Reply

    • Skyblue

      January 31, 2014 at 12:33

      What fucks me off is that we are already paying tax on these items as the companies providing the service are liable for tax in their native countries. I am so sooooo depressed as a Saffa right now, it just feels like we are getting screwed and screwed and screwed and no-one is offering a reach-around…

      Reply

      • Gavin Mannion

        January 31, 2014 at 12:35

        Not all the time actually.. a lot of these sales are tax free for the retailers and even if they are paying the fact is our money is still being pumped out of the country

        Reply

        • InsanityFlea

          January 31, 2014 at 12:37

          They weren’t worried about the money leaving the country from the e-tolls BS.

          Reply

          • Skyblue

            January 31, 2014 at 12:38

            1000 upvotes!

          • RinceThis2014

            January 31, 2014 at 12:42

            THIS.

          • Gavin Mannion

            January 31, 2014 at 12:50

            No disagreement there…

          • InsanityFlea

            January 31, 2014 at 12:51

            Give us some good news plz sir 🙂

        • SheHulkNigri

          January 31, 2014 at 12:41

          But ask yourself the question: Why am I going to overseas companies for my purchases? Because as a country, the supply for certain goods in South Africa is crap. I have no choice but to head outside the borders to purchase goods.
          Ever seen a CD by Within Temptation in Musica?

          Reply

          • Ricardo Harvey

            January 31, 2014 at 12:46

            Wow…within temptation, im surprised and impressed, the wife loves them, i had to order from amazon to get it for her

          • Alien Emperor Trevor

            January 31, 2014 at 12:48

            I’m your wife? Damn those ID document forgers!

        • Eric

          January 31, 2014 at 14:01

          So in term of dollars, we’ll be paying more for our digital content than Zim does(or any other country besides the country where the content is sourced from).

          Reply

    • SheHulkNigri

      January 31, 2014 at 12:34

      Gavin, please! Our guvmunt is already telling us to bend over and take it in the ass with regards to tax, e-toll and lord knows what else. What they want is more money to spend on fancy cars, R15 000, 00 office chairs (I kid you not) and fooking KFC.

      Reply

      • InsanityFlea

        January 31, 2014 at 12:35

        Lies it’s Nandos & McD’s!

        Reply

      • Gavin Mannion

        January 31, 2014 at 12:36

        Hey it’s not like I want to pay more money. I’m just saying I understand the reasoning. I’m not happy propping up American corporations with my money while they get American tax breaks and our country gets shafted.

        Reply

        • CrasH

          January 31, 2014 at 12:46

          Also, you bring up a good point, cant foreigner claim back tax when they down here? On a large list of items, so then i want to be able to claim the tax back from there country if i have to pay my own countries tax.

          Reply

        • SheHulkNigri

          January 31, 2014 at 13:10

          My gripe is with the citizens of our country getting shafted. If South Africa was the poster child for responsible government spending I would have said by all means, give them more money.
          But my examples above refers: They spend a shit load of our tax money on unneeded bullshit: Some minister’s car has clocked more than 120 000 KM’s and she needs a R1.2 million car.
          Meanwhile, in Vereeniging (hardly a backwater little town) the fucking potholes got grass growing out of them. A pothole, left long enough for fucking grass to grow out of! And I am talking knee high grass here, my friend.

          Reply

    • CrasH

      January 31, 2014 at 12:44

      If they charge us tax or not, the game company is not in our country and thus the money will ALWAYS leave the country, the only differance is now they want a piece of the pie.

      If they took all that money and pumped into game developement locally, the I would not really mind that much, but i know for a fact that SA does not know how to use money for what it was intended.

      The fuel tax on petrol is suppose to be for traffic officers and road maintanance…
      So the fact they put up tolls means all that tax already paid to maintain the road was not put to good use…

      Reply

    • General JJ PanGirl

      January 31, 2014 at 13:03

      If the butthole ANC spent the money they received well, sure, why not? But they don’t. This is just another way to line their coffers.

      Reply

  8. InsanityFlea

    January 31, 2014 at 12:33

    And how exactly will they track these purchases? watching my bank account?

    Reply

    • CAE9872

      January 31, 2014 at 13:09

      They can/do already…seeing as today is tax return deadline for 2013 only right to remind everyone 🙂

      And also that SARS instituted a system of allowing them to access anyone’s bank account…

      Reply

      • InsanityFlea

        January 31, 2014 at 13:38

        dude, you’re killing my friday here 🙁

        Reply

        • CAE9872

          January 31, 2014 at 14:04

          soz…depending where you live (JHB in a while, CT already started, what do rest of country do on Fridays?), gaming weekend awaits and you can leave rest behind.

          Well til Monday…and gears all start again…

          Reply

        • Eric

          January 31, 2014 at 14:18

          Besides taxes for your digital content, you already pay extra on the service to get it to your harddrive. You’re paying telkom and your ISP for that download, either in Cap or as your uncapped subscription. A payment you’re already being charged VAT on.

          Reply

      • ToshZA

        January 31, 2014 at 14:45

        For transactions over R5k – SARS is automatically notified.

        Reply

  9. Alien Emperor Trevor

    January 31, 2014 at 12:39

    So this IS depress your readers day. How are they even planning to implement or enforce this, or did someone just have a brainfart?

    Reply

    • RinceThis2014

      January 31, 2014 at 12:40

      I was wondering the same thing. That being said, what if you just make the big institutes that channel the money add 14% on?

      Reply

      • Alien Emperor Trevor

        January 31, 2014 at 12:43

        Can’t just add on 14% without knowing what it’s for. What’s to stop me transferring money to paypal & using that to purchase anyway?

        Reply

        • RinceThis2014

          January 31, 2014 at 12:43

          Make paypal pay 14%? I think it’ll be made law they need to register for tax, as in the companies.

          Reply

          • Alien Emperor Trevor

            January 31, 2014 at 12:45

            They still can’t just implement a blanket 14% onto transactions.

          • RinceThis2014

            January 31, 2014 at 12:45

            This is ANC, we do watum we wantum!

          • Alien Emperor Trevor

            January 31, 2014 at 12:54

            Fortunately SARS is one of the better run departments – so I’m happy to wait & see what they do.

          • ToshZA

            January 31, 2014 at 14:45

            Have you ever been to a SARS office? Its hell. Saying that, this is the most important government department, as this is their new car or R200m mansion. It’s the only department they care about.

  10. RinceThis2014

    January 31, 2014 at 12:40

    This is not cool. Really. I pay a goddamn fortune in taxes as is, and now MORE?

    Reply

    • CrasH

      January 31, 2014 at 12:53

      South africa has one of the highest taxes in the world.

      Most people think of tax as a deduction of there salary but in SA there is a lot of micro transaction happening that are all tax as well.

      Bank charges gets taxes… I hardly call that a Value Added service (mean vat mean value added tax)
      Petrol has Tax and levi’s
      Water has Tax and Levi (considered a human rights/needs not value added)
      Electrisity has Tax and levi (also human rights/needs not value added)
      School fees, doctors, hospitals (all human rights)
      Smokes and alcohol are Sin Tax and Vat and Levi
      Buying a house has transfer duties which are a tax and then a serivce charge with vat added…
      Its was worked out but likely higher now that for every R100 you earn R77 is taxes in one form or another…

      Reply

      • RinceThis2014

        January 31, 2014 at 12:55

        Everything you said mate. This makes me feel so kak, I mean come on, when does it end?

        Reply

        • CrasH

          January 31, 2014 at 13:09

          Only 2 things in life is certain, death and taxes, but rember when you die, your estate gets taxed before transfer, the ground your burried has land tax, or if your cermated you have service tax (like CO2 tax now aswell :P)
          And a full tax review is done if you had lots of cash to see if any tax was missed…

          So in short, even after death, there is more tax…

          Reply

      • Skyblue

        January 31, 2014 at 12:58

        Agree with you 100%. 23% after the government is done with me.

        Reply

      • Alien Emperor Trevor

        January 31, 2014 at 12:59

        Let’s not forget the health plan system they’re also rumbling about.

        Reply

        • RinceThis2014

          January 31, 2014 at 13:00

          Oh well done. I thought it couldn’t get worse. Well done indeed…

          Reply

          • Alien Emperor Trevor

            January 31, 2014 at 13:07

            I like helping. Have I ever told you my ideas for EA or MS? 😉

          • General JJ PanGirl

            January 31, 2014 at 13:08

            EA has something to do with fire and a pit, right?

  11. Lourens Jordaan

    January 31, 2014 at 12:44

    Dear Lazygamer staff, please give us at least some good news today. PLEASE!!!

    Reply

    • RinceThis2014

      January 31, 2014 at 12:48

      I said the same thing. This is killing me. It’s 35oC in CT CBD and I need some happy vibes!

      Reply

      • Gavin Mannion

        January 31, 2014 at 12:48

        3 hours until beer time?

        Reply

        • RinceThis2014

          January 31, 2014 at 12:49

          Damn you! I get off at 5! You B*stard! Not helping!

          Reply

          • Gavin Mannion

            January 31, 2014 at 12:50

            On a Friday? What the hell… I’m already at home drinking…

            This is why JHB is better than CT

          • RinceThis2014

            January 31, 2014 at 12:52

            Fluck you, most Capetonians don’t even go to work on Friday. Just me in my frigging NGO.

          • Alien Emperor Trevor

            January 31, 2014 at 12:52

            Get a real job, Susan.

          • Admiral Chief in Vegas

            January 31, 2014 at 12:53

            hahaha susan

          • RinceThis2014

            January 31, 2014 at 12:55

            You shut up, or I won’t pitch your company as the ones who need to install aircons in our office 😛

          • Alien Emperor Trevor

            January 31, 2014 at 12:55

            lol. I can make them leak. Drip drip drip 😛

          • RinceThis2014

            January 31, 2014 at 12:57

            Frankly right now if my office was drip drip dripping I’d move my fucking desk right under it…

          • Alien Emperor Trevor

            January 31, 2014 at 12:58

            True, I just went for a walk around the block – good thing I’m so white that I reflect the sun like a mirror.

          • RinceThis2014

            January 31, 2014 at 12:59

            Pah, you’re white? Get back in line Susan, you have nothing on me. I’ve advised HR to issue sunglasses for the next staff outing least they all go fucking blind looking at my awesomeness..

          • CAE9872

            January 31, 2014 at 13:07

            Yip I can attest to that! NGO in middle of Cape Town? Now that is not usual…

            My wife has been bitching about the heat. I am quite cool in my games roo…I mean office.

          • RinceThis2014

            January 31, 2014 at 13:11

            You utter bugger! Lucky devil!

          • General JJ PanGirl

            January 31, 2014 at 13:08

            And me here at the one business that doesn’t close. Ever.

          • Alien Emperor Trevor

            January 31, 2014 at 13:09

            Death & Taxes Inc?

          • Eric

            January 31, 2014 at 14:09

            I’m in it with you brother. Also in this heat. No aircon. Until 5

          • RinceThis2014

            January 31, 2014 at 14:33

            Went out and bought a little fan. thing is doing F all to cool me down…

          • ToshZA

            January 31, 2014 at 14:41

            Even in my previous company, Jozi closed at 6pm on Fridays, CT closed at 3.

          • Gr8_Balls_o_Fire

            January 31, 2014 at 13:56

            We get off at around 6/6.30 on Fridays. Every other day it’s 5/5.30

          • RinceThis2014

            January 31, 2014 at 14:22

            I feel for you bro.

        • Unavengedavo

          January 31, 2014 at 12:56

          It’s Friday dammit! we need good news, not just beer time countdown!

          Reply

          • CrasH

            January 31, 2014 at 13:13

            Your right, time for the brandy and braai clock to start

            Then again mine only has 50 minutes to go…

          • General JJ PanGirl

            January 31, 2014 at 13:14

            While we can still afford brandy and braais

      • Johan du Preez

        January 31, 2014 at 16:45

        Hands Rince a ice cold beer. Its insanely hot today even the pool water is luke warm.

        Reply

        • RinceThis2014

          January 31, 2014 at 17:56

          Thanks! Hang about. You said swimming pool! Nooooo!

          Reply

    • Lardus-Resident Perve

      January 31, 2014 at 12:57

      Let us hope they do not screw us on the ION today! We have had a great year thus far regarding IONs…

      Reply

      • ToshZA

        January 31, 2014 at 14:40

        Soz man, LG is going to have to charge for the “Extra Hot” DLC now. Otherwise you’re just going to get cows.

        Reply

  12. DrKiller

    January 31, 2014 at 12:47

    How are they going to force us? I mean Netflix is not available in SA, so obviously NetFlix thinks we are in the UK already. How are they going to force us to pay VAT?

    Edit: Actually.. Why do we need to pay tax on something that is not available locally?? That doesn’t make ANY sense

    Reply

  13. Alien Emperor Trevor

    January 31, 2014 at 13:00

    As an aside, how many people remember GST & having to work out total prices in your head?

    Reply

    • Exalted Overlord Geoffrey Tim

      January 31, 2014 at 13:02

      Yeah. It’s still like that in the US. I get very confused whenever I go there.

      Reply

      • Alien Emperor Trevor

        January 31, 2014 at 13:18

        I still find it funny they use imperial measurements.

        Reply

        • General JJ PanGirl

          January 31, 2014 at 13:19

          “funny”

          Reply

  14. General JJ PanGirl

    January 31, 2014 at 13:01

    I hate this government

    Reply

  15. ElNicko

    January 31, 2014 at 13:07

    Honestly , this is only going to make Piracy more rampant….

    Reply

    • General JJ PanGirl

      January 31, 2014 at 13:07

      MUCH more

      Reply

  16. Lizzard

    January 31, 2014 at 13:09

    Guys and Girls stop being so selfish. It is a civil duty to pay for Nkandla, these thugs wont pay for themselves….

    Reply

  17. Unavengedavo

    January 31, 2014 at 13:11

    Well at least we know who’s to blame for this article!!!

    Reply

    • Alien Emperor Trevor

      January 31, 2014 at 13:17

      That’s not what she said! (re final tweet)

      Reply

    • Eric

      January 31, 2014 at 14:12

      lol. Sent almost the same message to @LazygamersNet

      Reply

  18. Rags

    January 31, 2014 at 13:15

    This is going to hurt us web developers 🙁

    Reply

    • geelslang

      January 31, 2014 at 14:17

      Please explain?

      Reply

      • Rags

        January 31, 2014 at 14:38

        Use a lot of international services from magazine subs to servers that’s going to add a lot of dollahs on the already shitty exchange rate.

        Reply

      • ToshZA

        January 31, 2014 at 14:38

        We buy resources all the time. Vectors, Stock images, Plugins for our software, music etc. – so this means all of that will increase the cost to do business, which in turn means we’d need to charge more, which is always a shit thing.

        Reply

        • General JJ PanGirl

          January 31, 2014 at 14:41

          Jeez man. They really don’t think these things through properly. Now is really not the time when we need things to cost even more.

          Reply

          • ToshZA

            January 31, 2014 at 14:51

            Yeah pretty much. It’s already tough just feeding yourself and keeping yourself dry and warm. This is going to hurt an already hard freelance market quite substantially.

          • General JJ PanGirl

            January 31, 2014 at 15:22

            And online entrepreneurs.

        • Kromas

          January 31, 2014 at 15:18

          You claim your tax back just like any other equipment purchase.

          Reply

  19. General JJ PanGirl

    January 31, 2014 at 13:16

    So what if someone uses PayPal to buy on Steam? How does that work? So you get taxed for using PayPal’s service and for buying something on Steam?

    Reply

    • Eric

      January 31, 2014 at 14:12

      Exactly

      Reply

    • Kromas

      January 31, 2014 at 15:17

      Paypal south africa = Nedbank (I think or was is FNB). However if you have a US paypal account like me your all fine and dandy.

      Reply

      • General JJ PanGirl

        January 31, 2014 at 15:23

        Mine’s a US one. So it’s only the exchange rate to worry about then.

        Reply

        • Kromas

          January 31, 2014 at 15:30

          Reaping the rewards from trying to set up a bloody account before I had a credit card of my very own years back. Maybe we should buy games for other people and charge a 10% fee.Still cheaper than the taxed way. 😛

          Reply

          • General JJ PanGirl

            January 31, 2014 at 17:02

            Haha. Quite.
            I also set mine up out of desperation without a credit card.

  20. Sir Rants A Lot Llew. Jelly!!!

    January 31, 2014 at 13:37

    FFFFFUUUUUUUUUUUUUUUUU

    Reply

    • General JJ PanGirl

      January 31, 2014 at 13:37

      CK

      Reply

      • Sir Rants A Lot Llew. Jelly!!!

        January 31, 2014 at 13:48

        Bloody ridiculous. They are going to make a KILLING in profits and it’s all going to be squandered

        Reply

        • General JJ PanGirl

          January 31, 2014 at 14:25

          Not to mention they’ll practically promote piracy.

          Reply

  21. Guava_Eater

    January 31, 2014 at 14:14

    Real idiots! All they want is more, more, more. “oh look, he doesn’t have any more to give…. let’s take some more!”

    Reply

    • General JJ PanGirl

      January 31, 2014 at 14:26

      Those top of the range cars and planes are getting expensive for the ANC.

      Reply

      • SheHulkNigri

        January 31, 2014 at 14:28

        As is the Nando’s, KFC, McDonalds…

        Reply

  22. ianmin

    January 31, 2014 at 14:15

    I read this brilliant comment on another SA forum and thought I’d share:

    “Why not do the logical thing – Erect E-Tolls over the ISP’s gateways and everytime we access a foreign website we get charged R2-5 depending on number of kilometres.”

    Reply

  23. ianmin

    January 31, 2014 at 14:29

    True story.

    Reply

  24. Sageville

    January 31, 2014 at 14:43

    So what now, we gonna end up paying R1140 for a console game? Fuck that.

    Time to pirate.

    Reply

    • ToshZA

      January 31, 2014 at 14:52

      Retail is already taxed. So that’s not going to be affected by this change – its only the exchange rate that’s going to bring that up.

      This will affect everyone who buys games off Steam or GoG or Humble Bundle or any of the digital distribution platforms.

      Reply

  25. cloudy

    January 31, 2014 at 15:09

    So what if our money is leaving the country. its our money. The government is not doing anything to facilitate these purchases, why should they get a cut?

    Reply

    • General JJ PanGirl

      January 31, 2014 at 15:21

      I understand the idea behind it. It’s the same as using import duties. If you don’t then companies outside the country could take business away from local entrepreneurs, which counters growth. So I get why they want to do it, but they’re approaching it the wrong way and not thinking it through. It’s going to increase piracy like crazy.

      Reply

      • Guest

        January 31, 2014 at 15:37

        If local retailers could provide a service that matches the quality of services provided internationally, that would help.
        But I don’t see that happening in the foreseeable future.
        Is there a humble bundle, gog, steam type service locally? Nope.
        Github? Nope.
        Sucks to be us 🙁

        Reply

  26. CypherGate

    January 31, 2014 at 16:08

    2014 is really starting to look like a nightmare.

    Reply

  27. Ultimo_Cleric N7

    January 31, 2014 at 16:35

    Not suprised. E-tolls is not working so Zuma has to pay for his house SOMEHOW…..
    I say we all go to Nkandla and just raid it like a house party.
    FREE BEER AT JACOB’S DIGS! TELL EVERYONE!!! POOL PARTY, INVITE EVERYONE YOU KNOW ON FB!!!!!!!

    Reply

  28. Peter Cetera

    February 3, 2014 at 07:10

    Is this not called White man’s tax like eToll?

    Reply

  29. Theo Steenekamp

    February 3, 2014 at 08:09

    Sorry my opinion and I know its a family site. But in all seriousness, fuck this country.

    Reply

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