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South African Authors Will Now Pay VAT on Amazon eBook Purchases

South African Authors Will Now Pay VAT on Amazon eBook Purchases

 

Since early February 2014 South Africans who purchase their eBooks through the world's largest eBook retailer, Amazon, have been paying VAT on top of the normal Amazon eBook list Price. Now let's put this 14% increase in perspective before I get accused of bemoaning South Africa's progress towards progressive digital legislation!
 
The addition of VAT onto Amazon's eBook sales and other digital products purchased outside our borders is nothing new, this pretty much brings us in line with the rest of the world.
The taxing of international internet companies such as Amazon and Apple are expected to net the government a tidy sum of almost R980m
One could also argue that the addition of VAT onto Amazon's Kindle eBooks would make our local eBooks that much more competitive.
However here is what really irks me, the VAT jumps on the back of the already troublesome Amazon Whispernet Surcharge.
 
For those who might not have have heard of the Amazon Whispernet charge this is a phantom $2 fee that is added onto the list price of eBooks for customers outside the developed countries such as the US, UK, Germany, France etc. This $2 surcharge does not increase an authors royalties.
This means that customers purchasing an eBook that would normally retail for $0.99 in the US would now pay $3.41 ($0.99 + $2 * 1.14)
 
So as an author it means your customer is paying more for your eBook, and unless you are VAT registered (which most self-published authors will not be) you will see even less of your eBooks list price on Amazon as royalties paid to you)
Whilst this additional tax does is understandable, it does take away some advantage that was desperately needed by our authors.
 
Let's hope this that the governments affect on our author's eBooks sales on Amazon will stop there.
What are your thoughts on the additional of VAT on Amazon eBooks, will this affect your eBook sales, maybe it has already - Let us know!
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