A Samsung Galaxy S7, and a slightly less smart pho
  • The Samsung Galaxy S7 is a telephone, the high court in Pretoria has ruled.
  • The ruling was necessary after Samsung insisted that the S7 is not, in fact, a telephone, at least for tax purposes.
  • The SA Revenue Service originally classed both the iPhone 6S and the Samsung handset in an "other" class of telephone equipment.
  • When the tax man tried to correct that error, Samsung tried to pitch the S7 as more laptop than phone, in an argument the court described as disingenuous. 
  • For more stories go to www.BusinessInsider.co.za.

The Samsung Galaxy S7 is a telephone, says the high court in Pretoria – even if its maker argues otherwise, in a fashion the court labelled "disingenuous".

The South African arm of Samsung electronics had gone to court to force the SA Revenue Service (Sars) to treat the S7 as telecommunications equipment other than a telephone, for the purposes of calculating import tariffs.

But after consideration of expert testimony from both sides and survey results from Samsung on how people use its phones, the court had found "that its principal function is telephony" and that there was no convincing argument "the product is a machine other than a smartphone", said judge Nomonde Mngqibisa-Thusi.

Samsung's efforts were dismissed with costs.

Sars had initially categorised the S7 – as well as the Apple iPhone 6S – in a tax class reserved for telecommunications equipment that do not operate as telephones, formally described as "machines for the reception, conversion and transmission or regeneration of voice, images or other data".

When Sars later realised the S7 is something else – a tax code described as "telephones for cellular networks or for other wireless networks designed for use when carried in the hand or on the person" – it changed the tax treatment of imported handsets retroactively.

Samsung insisted Sars had been right the first time around. Yes, said the company, the S7 could make telephone calls, but its principal function is actually to connect to the internet and allow the use of social media and playing games and music, not making telephone calls. 

Also, people mostly don't actually use it make traditional telephone calls, Samsung said.

Sars countered that making a call over WhatsApp or Skype is still using a handset as a telephone – and looks like phone. It has "a speaker at one end which is audible when placed against the operator’s ear and at the other end has a microphone to receive speech or voice from the operator’s mouth," the tax service told the court.

The court agreed, finding that a phone doesn't stop being a phone because it also includes functions found in laptop or desktop computers.

(Compiled by Phillip de Wet)

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