Scrap the SABC TV licence scheme, says OUTA

Watching TV during lockdown. (Photo: Getty Images)
Watching TV during lockdown. (Photo: Getty Images)
  • The Organisation Undoing Tax Abuse (OUTA) has responded to the controversial draft white paper on audio and audiovisual content services policy.
  • The draft legislation wants to change the law to compel video streaming services and pay-TV operators to collect SABC TV Licence fees.
  • In their submission, OUTA asks: "Why should Netflix and DStv be obliged to collect revenue on behalf of another entity."

Scrap the SABC TV Licence scheme. So says the Organisation Undoing Tax Abuse (OUTA) in its submission in response to the South African government's controversial plan to force video streaming services and pay-TV operators to collect a SABC TV Licence fee from DStv subscribers on behalf of the public broadcaster.

OUTA has responded with an official submission to the controversial draft white paper on audio and audiovisual content services policy of the department of communications and digital technologies.

The draft legislation not only wants to change the law to compel subscription video-on-demand (SVOD) video streaming services and pay-TV operators to collect SABC TV Licence fees on behalf of the financially struggling South African public broadcaster.

The proposed legislation – on which the public and the country's TV and film industry can still comment – also wants to broaden the definition, thereby forcing people to pay a SABC TV Licence for watching content like Amazon Prime Video on a tablet, StarTimesON on a smartphone, or even if they're not watching any SABC content.

READ MORE | SABC wants DStv, Netflix viewers and mobile users to pay a TV licence fee

"The point of what we are witnessing with the move by SABC and the SABC TV licenses related to Netflix etc. is truly the tip of the iceberg," says OUTA.

In its submission, OUTA asks "why should Netflix and DStv be obliged to collect revenue on behalf of another entity and how will this initiative be facilitated? Furthermore, how will the money be collected and then handed over to the SABC?"

"How will subscribers practically be managed because Netflix and DStv subscribers may sign up and cancel at any time?"

"Considering the poor transparency and accountability measures, how will the department ensure that the collection of revenue from Netflix and DStv is transparent and what are the measures of accountability in place to ensure all funds collected are used in an appropriate manner and not squandered as it frequently occurs in government departments?"

"Will this not be another method of getting more money from citizens to fund corrupt activities of the department? With technology and innovation ever-evolving, how will this policy accommodate progress and also manage competitors and new businesses, devices etc.? Or does it plan to discriminate against Netflix and DStv?" OUTA asks.

OUTA says that "It is evident that the SABC has been financially mismanaged and politically interfered with over the past decade. Netflix and other digital disruptive business models are also game-changers, and the SABC has been sleeping while its competitors got the upper hand with innovative solutions and novel service offerings."

According to OUTA "The notion of switching the failed SABC TV Licence revenue mechanism to other commercial broadcasters or live streaming entities, or to add a tax to the sale of electronic devices (laptops, phones and iPads) is not a solution".

OUTA says that "It is emotive to suggest that international video streaming services are "actively targeting South African audiences" and "extracting revenue" from South Africa, where they are providing quality and affordable services to a global audience.".

"Finding the South African audiences to be attractive could be a result of low quality and expensive service delivery locally, functioning as a push-factor towards these international video streaming services."

According to OUTA the draft legislation "also introduces shocking remedies to the international video streamers, by stating that potential compliance measures include, amongst others, "blacklisting, blocking the video streaming services at the levels of ISPs" etc. This is a blatant rebuttal of freedom of choice, the democratisation of information and universal access".

How will content quotas for Netflix be enforced?

"How will South African content quotas be enforced for online broadcasting services" like Netflix South Africa, Amazon Prime Video and others, OUTA asks in its submission.

Video streamers like Netflix who fail to make a percentage of their catalogue "local" according to an imposed 30% content quota "need to pay a specified sum of money, or minimum percentage of gross revenue into a fund, which supports the creation of the audio and audiovisual South African content, the draft white paper states.

READ MORE | SA wants to force a 30% local content quota on streamers like Netflix – here’s why it's a bad idea

"This is highly problematic, for who will host, monitor and account for that 'fund', and how can it be sure that on-demand services, like Netflix, will be 'penalised' and their contributions to the 'fund' be used to enrich state coffers instead of the intended support of quality South African content?" OUTA says.

Changing a failed system won't be successful

OUTA says in its submission that it "believes that the SABC TV License model is failing and our position is that any tax or levy that fails to achieve required compliance and is failing, due to poor administration and unenforceable mechanisms, should close down".

OUTA says that "The inability to manage a current failing system will not result in success, should the system only be amended. The systemic concerns are rooted within the entities themselves, and therefore an internal audit and evaluation ought to take place before the responsibility becomes displaced onto the citizens".

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