South Africa’s Minister of Communications Solly Malatsi is seriously considering imposing tax levies on streaming giant, Netflix and DStv, raising the matter in a Tuesday parliamentary Q&A session.
Minister Malatsi is taking this measure as part of a larger plan to ensure South African Broadcasting Corporation’s (SABC) financial viability amid the Corporation’s financial struggles.
Exploring funding options for SABC
Minister Malatsi highlighted that the current TV licence system is ineffective due to low compliance rates and high collection costs.
He urged automatic tax collection for streaming services to modernise finance and increase compliance. However, this levy does not apply to families with a current TV licence.
Malatsi noted, “The potential streaming levy would be automatically collected to modernise funding and improve compliance, potentially stabilising the SABC’s revenue stream.“
An additional alternative currently being examined is the establishment of an independent SABC fund funded by a household or business levy collected by the South African Revenue Service (SARS).
This method could lower collection costs and ensure stable revenue, but as an additional tax, it might face public resistance.
Read also: South Africa court throws out Vodacom’s spectrum pooling bid
Multichoice disputes tax levy
The proposed levy has sparked debate, with MultiChoice, the parent company of DStv, expressing concerns about the fairness of expecting private companies to collect revenue for a government entity.
Malatsi’s proposal differs from previous suggestions in that it does not single out specific operators but requires all streaming services to contribute.
The introduction of such a levy could increase consumers’ subscription costs and require regulatory adjustments. Despite these challenges, the government is keen on finding a sustainable funding model for the SABC, which is essential for its survival.