Government is reintroducing a 7% ad valorem tax on imported computer monitors because many people, it says, are using them as television sets. The tax on monitors had been scrapped in 2004.

TV sets and monitors that include TV tuners attract ad valorem duties. But for the past seven years, no duties have applied to imported monitors (or any other computer equipment).

“Ad valorem excise duties on monitors were abolished in 2004 based on the assumption that they were used as computer screens,” according to documents accompanying finance minister Pravin Gordhan’s budget speech in parliament on Wednesday.

Ad valorem duties on monitors will be reinstated at a flat rate of 7% with effect from 1 April.

Hein Engelbrecht, MD of computer assembler and IT distributor Mustek, says the net result of the change will be that the price of computer monitors will go up by 7%.

He says government may have made the change because consumers who subscribe to satellite TV services like MultiChoice’s DStv don’t require a TV tuner in their monitors to receive broadcasts. They only need a tuner if they wanted to watch free-to-air terrestrial channels.

Engelbrecht speculates that national treasury may have seen a decline in ad valorem duties on TV sets because people are buying monitors instead.

Mustek CEO David Kan says more information is required from the SA Revenue Service about how the duties will be applied and under which tariff codes.

However, Kan says there may be a legal loophole that allows computer monitors to be classified video monitors, allowing importers to earn a rebate on the new duties. — Duncan McLeod, TechCentral