Online and digital retailers are now liable to register as value-added tax vendors in South Africa, which means that consumers will have to pay VAT on future purchases of e-books, apps, music and other digital goods.

The implementation of VAT is said to be an attempt to “level the playing field between local and international suppliers”.

Foreign suppliers of electronic services are now required to register for VAT in South Africa where the supplies of such services are made to residents of South Africa or payment is made from a South African bank account and the value of these supplies has exceeded R50 000. This will likely affect large internet groups such as eBay, Apple, Amazon and Google.

In the past, consumers of digital goods were required to declare their online purchases with South African Revenue Service (Sars), but because many people were unaware of this, millions of Rands were unpaid and the economy of the industry itself was hard to police.

The Apple App Store in SA is has been one of the first to be hit by the new digital tax law.

[source: Moneyweb via MyBroadband]