Good news for the PC industry is that the ad valorem excise duty for PCs will be scrapped from 1 April, according to finance minister Trevor Manuel.
Presenting the 2003/04 national budget before Parliament yesterday, Manuel said this step was taken to benefit both business and consumers investing in IT.
The tax on PCs has long been criticised as it is difficult to manage and allowed a window for parts and components to be used to side-step the tax.
But the tax only brought government R572 million out of a total estimated revenue stream of R325 billion for this year and represents a tiny fraction of the R15.1 billion in tax exemptions granted by government.
Tarsus Technologies MD Guy Whitcroft says the price of products affected will drop in price by about 5%. Coupled with the performance of the rand, "we will now have products that will be as much as 25% cheaper in rand terms than they were in the middle of last year".
However, there could be better indirect news as government plans to set aside R1 billion to increase expenditure on the National Research and Development Strategy for programmes relating to health, industrial biotechnology, food security and agricultural production.
Manuel said government also plans to spend R105 billion on physical assets that will include computers for the SA Police Service.
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