South Africa's removal of the 9% ad valorem tax on entry‑level smartphones has triggered a surge in sales
Smartphones. Picture: iStock
South Africa’s removal of the 9% ad valorem luxury excise duty on entry‑level smartphones has triggered a surge in sales, with more than a million additional devices sold in less than a year.
This is according to a new Global System for Mobile Communications Association (GSMA) report.
GSM report
The report, titled Accelerating Smartphone Adoption through Tax Reform: Evidence from South Africa, shows that between March 2025 and February 2026, approximately 1.1 million extra entry‑level smartphones priced below R2 500 were purchased.
On average, 100 000 additional devices enter the market each month.
Smart policy
Communications and Digital Technologies Minister Solly Malatsi said the milestone shows how smart policy can drive digital inclusion.
“One of my key priorities as minister has been to make smart devices more affordable. Every smartphone in the hands of a South African unlocks opportunities for economic activity that helps uplift the quality of life.
“It enables young persons to search for jobs, learners to learn online, and empowers citizens to access government services, online banking, and connect entrepreneurs to more customers,” Malatsi said.
Smartphone market
The GSMA data further reveals that the smartphone market grew by about R400 million per month, rising from R2.7 billion to R3.1 billion.
Importantly, the removal of the tax reversed a sustained decline in entry‑level smartphone sales, placing the segment on a positive growth trajectory.
Malatsi emphasised that the growth in smartphone sales represents more than consumer demand.
“This is a prime example of how the right policy decisions, supported by collaboration across government, can remove barriers and give more South Africans opportunities that improve lives. It shows that we can improve people’s daily lives and help build a more inclusive digital economy,” he said.
Partnership
The minister commended the partnership between the National Treasury and his department, noting that policy interventions can have a tangible impact when aligned with broader developmental goals.
With over a million extra smartphones now in circulation, Malatsi believes the reform has laid the foundation for greater participation in the digital economy, bridging divides and creating new opportunities for citizens across the country.
Smartphones, which have gradually increased in price, have historically been taxed as luxury products in South Africa, with a 9% ad valorem tax applied to the devices’ export price.
An ad valorem tax of 9% has historically been applied to all smartphone sales in South Africa, as well as to motor vehicles, electronic devices and perfume.
