DStv and Netflix tax still on the cards for South Africa

The government is exploring several alternative funding mechanisms to ensure the South African Broadcasting Corporation’s (SABC) financial sustainability, including a levy on local and international streaming services.

This was revealed by Communications and Digital Technologies Minister Solly Malatsi in a recent parliamentary Q&A session.

Malatsi responded to a question from IFP MP Khethamabala Sithole, who asked about potential funding sources for the SABC while legislative reforms to its funding model are still in progress. 

The minister acknowledged that the current TV licence system is failing, citing low compliance rates, high collection costs, and inflation as key issues. 

According to the minister, the potential streaming levy would be automatically collected to modernise funding and improve compliance, potentially stabilising the SABC’s revenue stream. 

Malatsi added that households that remain up to date with their TV licence payments would be exempt from paying the levy.

However, Malatsi admitted that this could lead to increased consumer subscription costs and would require regulatory adjustments. Apart from the streaming levy, Malatsi outlined other funding options that are under consideration.

One possibility is a household or business levy collected by the South African Revenue Service (SARS) and maintained as an independent SABC fund. 

This method would lower collection costs and ensure stable revenue, but the minister noted that it could also face public resistance as an additional tax. 

Another short-term measure being explored is a conditional grant from the National Treasury, which would provide immediate financial relief. 

However, Malatsi again pointed out the negatives and said this strategy is considered unsustainable in the long run.

Additionally, the SABC has requested that the government reapply for a loan guarantee, supported by its recent unqualified audit outcome—the first since the 2009/10 financial year. 

The minister said that this would enable the broadcaster to secure an overdraft facility to fund critical infrastructure. 

However, as Malatsi noted, while this approach offers immediate financial flexibility, the SABC would still be responsible for repaying the loan, putting further strain on the broadcaster. 

While these funding models are being investigated, the minister said that he had approved the final terms for a feasibility study to develop a sustainable funding model for the SABC. 

He noted that this study will better assess the broadcaster’s existing revenue streams, explore the new funding options mentioned above, and engage stakeholders to ensure practicality and sustainability.

Despite the speculation surrounding the proposed streaming levy, Malatsi’s spokesperson, Kwena Moloto, stressed that the department is merely exploring various funding models and has not made any formal proposals. 

“The Department is exploring several funding models, none of which have been adopted as a proposal at this stage,” Moloto told MyBroadband.

The SABC’s TV licence problem

In a separate parliamentary Q&A session at the end of 2024, Malatsi provided details on the scale of TV licence non-payment and the efforts to address it. 

The main reason for the SABC’s dire situation is that South Africans have staged a quiet tax revolt by refusing to pay their TV Licences.

According to the SABC, only 13% of registered TV Licence holders are paying their bills. This excludes households who have never bought a TV licence despite owning a TV.

Malatsi revealed that 7.5 million TV licence accounts had been handed over to debt collectors, yielding R139 million in collections between April and September 2024—an increase of R41.7 million compared to the previous fiscal period.

The minister said that the SABC has introduced several initiatives to improve compliance and encourage payments. 

“One such initiative is the Loyalty and Rewards Programme, launched in December 2023, which incentivises payments with rewards such as vouchers and airtime, tailored to different debt categories,” he said. 

Another strategy involves using Geographic Information System (GIS) data to identify unlicensed households by mapping physical addresses against the SABC’s TV licence database. “This data is then used to send targeted SMS and email reminders,” he said.

He further explained that Trace Alert flags are placed on the credit profiles of defaulting licence holders, which often prompts them to engage with the SABC and settle outstanding fees.

The SABC has also deployed a data analytics tool to profile licence holders based on province, age, and payment patterns.

Malatsi said this enables the broadcaster to design targeted collection strategies and marketing campaigns, improving revenue recovery efforts.