Smartphones over R2,500 or $150 are now considered luxury in South Africa as the country is set to remove the 9% luxury goods tax, known as the ad valorem tax, on smartphones below $150 starting from April 1, 2025.
This move aims to make basic smartphones more affordable, particularly for low-income consumers, and to facilitate the country”s transition from outdated 2G and 3G networks to modern 4G and 5G technology.
For years, South Africa has classified smartphones as luxury items, subjecting them to the ad valorem tax, which is levied on high-value goods such as motor vehicles, electronics, and cosmetics. However, with digital access becoming a necessity rather than a luxury, the government has decided to eliminate this additional tax burden on entry-level smartphones.