Johannesburg - Black empowerment company Wireless Business Solutions (WBS) has appealed to Finance Minister Trevor Manuel to allow for broadband Internet costs to be tax deductible for individual taxpayers when he delivers his budget speech next week.

Business website, Bizcommunity, reported on Monday that WBS CEO Thami Mtshali said the tax incentive would "help lift South Africa's broadband penetration rate of 0,3 percent out of the doldrums".

He believes that the incentive would "translate into increased disposable income likely to be used for productive endeavours such as reducing debt or investing in education".

"To illustrate, Unisa's Bureau for Market Research found that the second-highest percentage increase (up 21,4 percent per year) in household expenditure by black consumers between 1993 and 2003 was on education.

'Invest in things that will improve their quality of life'

"Put more money in people's pockets and they'll generally invest in things that will improve their quality of life," said Mtshali.

Other benefits for South Africa included the fact that broadband boosted Gross Domestic Product (GDP).

"For example, a recent Australian report estimated that increased broadband penetration would lift that country's GDP by between 0,5 and 2,5 percent."

Mtshali said a "massive uptake of broadband" would help South Africa exceed its six percent GDP growth rate target.

"The benefits will be most noticeable in under-serviced areas where mobile broadband is able to rapidly fill the void left by the absence of land-line technology."

Other benefits would include the promotion of human rights, greater access to educational information, expanded curricula and real-time collaboration among students.

"In health care, broadband will enable the practical implementation of telemedicine."

Costs associated with broadband Internet access are only tax-deductible for individuals who work from home or who use their broadband connection for business purposes.

"This ignores the fact that broadband is used at home by people looking for employment, study opportunities and engaging in other activities that benefit the economy," Mtshali said. - Sapa