Online businesses need to comply with various legal rules and obligations that aren’t always relevant to non-online enterprises. The most relevant pieces of legislation that online businesses must be aware about are:
Electronic Communications and Transactions Act, 2002 (“ECTA)
ECTA sets out the majority of the South African online and cyberlaw legislation. It determines various conditions that need to be met by any e-commerce platform and website. This includes:
- Information that needs to be displayed on your website or application
- The rights of any consumer concerning your platform
- Marketing ethics and rules.
Disregarding the importance and impact of ECTA can and most probably will be to the detriment of your online business.
Value added Tax Act 89 of 1991 (“VAT Act”)
According to the VAT act, all prices advertised and marketed by a business (including online businesses) need to include and make provision for VAT at 15%. An E-commerce website also needs to comply with the relevant terms of the VAT act and may consequently have to register as a VAT Vendor at the South African Revenue Service (“SARS”). If your e-commerce website is, however, structured by an adequate tax advisor, there might still be various ways in which to benefit from being registered as a Vat Vendor.
Protection of Personal Information Act, 2013 (“POPI”)
POPI, which by now must be a household name in South Africa, aims to regulate the consumer’s constitutional right of privacy. Only certain information provided by the user on your e-commerce platform may be used and may only be used for the defined purposes. Non-compliance with POPI may result in serious fines for any e-commerce business.
