According to auditing firm PriceWaterhouseCoopers (PwC), international media
companies are not being fairly taxed, or in some cases taxed at all, on content
supplied via online streaming and subscription services in South Africa. Head of
indirect tax for PwC Africa Charles de Wet stated that the country’s tax laws need to
be updated to align with the current digital economy and growth in the content
streaming market. “Digital giants should be held accountable and pay their fair
share of South African taxes,” said de Wet.
Overseas content providers have profited from the “tax-free’ nature of services
supplied to South Africa while local suppliers are required to pay both value-added
tax (VAT) and corporate income tax. The playing fields are therefore uneven when
it comes to local businesses competing with multinationals in the digital economy.
According to de Wet a number of foreign content providers, such as Netflix, may
not officially supply services to South Africa but are still accessed by South African
users by means of virtual private networks (VPNs) which are able to mask their
location.
“This further increases the gap between domestic and foreign players in the online
media industry and has a negative impact on revenues collected to finance
necessary public services for South African residents,’ said De Wet.
Source: News 24
