South Africa is going after gamers to bring in a little more coin. Pravin Gordhan, South Africa’s Minister of Finance announced today that games and electronics will now be subject to a new Value Added Tax (VAT) at a hefty rate of 14%. “The publication follows the Minister of Finance’ announcement in the 2013 Budget that all foreign businesses supplying e-books, music and other digital services in South Africa will be required to register as Value Added Tax (VAT) vendors,” the National Treasury said in a statement. It isn’t just gamers who will be suffering the new penalties. Even educational services like internet based classrooms and distance learning courses will be subject to the new tax.
But those that will be targeted the most are those that supply internet based games, electronic games, multiplayer RPG’s and other interactive games. Not just the games or services themselves are being taxed either. Anyone who supplies music, images, film or even writes ebooks about the games will be subject to the new VAT. The current application of VAT on imports does not lend itself to the effective enforcement on imported services or e-commerce where no border posts (or parcel delivery agents, e.g. the Post Office) can perform the function as collecting agents, as is the case with physical goods,” said the statement from the National Treasury.
There is an entire list that has been generated of all of those services and products that will be subject to the big tax that is coming. Distance learning programs, educational webcasts, internet courses and programs, webinars and games – especially games of chance are all going to be taxed. Internet auction services will also get taxed along with basically any game whatsoever where the result is influenced by player skill – so basically, any game, ever. Also, technical services related to websites, blogs, databases and others will also be subject to the 14 percent tax increase. The list is much longer and includes just about everything on the internet or in the gaming world. So, gamers beware. You’d better find a way to make some extra money if you want to continue your hobby.