South Africa boasts a vibrant smartphone market with a wide array of brands and devices available, however like with many things in South Africa, access to these essential devices remains a challenge for many, particularly those in low-income communities. This digital divide is further exacerbated by the looming shutdown of 2G and 3G networks, scheduled for December 2027, which could leave many vulnerable citizens behind.
During our visit to the HONOR exhibition at Africa Tech Festival, we had the opportunity to speak with Minister of Communications and Digital Technologies, Solly Malatsi, about this pressing issue. He expressed his deep commitment, even branding it as an “obsession” to making smartphones more affordable and accessible to all South Africans.
“I have been in conversations with treasury about Ad Valorem,” Minister Malatsi stated, referring to the luxury tax imposed on smartphones in South Africa. “The cost of smart devices, as it is, is a major barrier to affordability, and those conversations with treasury are ongoing.”
He acknowledged the need to balance tax revenue collection with affordability, emphasizing his focus on finding solutions that benefit consumers. “My obsession is about finding opportunities that can reduce the cost on the end consumer,” he reiterated.
The ad valorem tax, a luxury excise tax levied on smartphones in addition to VAT and import duties, significantly increases the cost of these devices. This tax burden disproportionately affects low-income consumers, hindering their ability to access essential online services and participate in the digital economy.
Minister Malatsi’s comments on addressing the issue of smartphone affordability seems to be a crucial step towards bridging the digital divide in South Africa. By reducing the cost of these smart devices, government can empower more citizens to access education, healthcare and employment opportunities, allowing them to fully participate in the digital age.
The challenge of smartphone affordability seems to be complex, with various stakeholders involved. However the ministers proactive approach offers a glimmer of hope, that perhaps by engaging with stakeholders, exploring tax reforms, and prioritizing digital inclusion, South Africa can pave the way for a more connected and equitable future.
