New ‘TV Licence tax’ for South Africa could be coming soon

 ·29 Sep 2023

Cabinet has approved a raft of new bills to be submitted to parliament, including the South African Broadcasting Corporation (SABC) Bill of 2023, which aims to overhaul the SABC’s funding model.

“Once passed into law, the Bill will result in the repeal of the current Broadcasting Act. The amendments will strengthen the efficiency of the operations of the public broadcaster,” Cabinet said.

“The Bill further proposes reforms in the SABC’s funding model and the TV-licensing system.”

While the full details of the bill and the proposed changes will only be known once tabled, the Department of Communication and Digital Technologies’ draft white paper on Audio and Audiovisual Media Services and Online Content Safety indicated that a new household levy would considered in the bill.

The whitepaper raised concerns over the SABC’s sustainability while pointing out the need to keep the public broadcaster financed and operational.

“(The) proposal on the SABC Funding Model is that the TV licence model must be phased out and replaced with a ring-fenced levy, collected by SARS. This proposed funding model is being considered in the SABC Bill,” the department said.

This comes as the SABC’s current funding model – based on the failed TV Licence system and declining ad revenue – has led to a near-collapse of the broadcaster, necessitating multi-billion-rand bailouts from the state.

Speaking before Parliament’s Communications and Digital Technologies portfolio committee earlier this month, SABC Board chair Khathutselo Ramukumba said that the TV Licence evasion rate has jumped to 87% in the 2022/23 financial year, an increase from 82% in the previous year.

Over 9 million South Africans owe upwards of R44 billion in unpaid licence fees – which the SABC is unlikely to ever see.

Ramukumba said that the organisation recorded a R1.1 billion loss in the financial year ended March 2023, which he blamed on intensified load shedding, further competition from “unregulated” streaming services, the analogue switch-off and a decline in advertising revenue.

He said that the loss is now in line with what the last board started with five years ago, negating the declining losses that the previous board was able to achieve.

“The projections for the 2022/2023 financial year were that the SABC would be breaking even with some marginal profit being reported,” he said

“Unfortunately, despite the interventions of our predecessor board and the (R3.2 billion) bailout, that progress that has been made in reducing those losses did not come to fruition.”

He added that the SABC is relying on struggling revenues from its commercial operations to fund its public service obligations, a situation which he said is not sustainable.

Changes incoming

The current thinking is to do away with TV Licences entirely and instead replace the failed system with a household levy. This has been the proposal that enjoys the most political support, and has been touted by the ANC and department players since 2020.

Previous proposals for this levy have been that it be technology-neutral and based on a household’s ability to access SABC services. This means households will be charged the TV Licence tax even if they don’t watch the SABC’s content or own a TV.

Other avenues being explored in making the SABC commercially viable is expanding its reach and service offering – with proposals that it be given a legislative mandate to operate satellite television, radio, and Internet services internationally.

Stakeholders have argued that any financial aid used to fulfil the SABC’s public mandate should be done in a responsible and fair way that does not limit competition with other commercial radio broadcasters.

The department, on the other hand, argued that this does not fit with international best practices, as, for instance, the British Broadcasting Corporation (BBC) has a commercial arm that sells its channels and the OTT platform while also commercialising its content.

The SABC has also entered the OTT space, with it launching its streaming service SABC Plus in November last year.

Read: South Africans give TV Licences the middle finger

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