A move to levy tax on all e-commerce products bought from companies that do not have a presence in South Africa is likely to net an additional R980m in tax revenue a year from value added tax (VAT), experts have said.

The government plans to levy VAT on all foreign companies that sell digital music, e-books and similar services in the local market.

A notice to this effect was issued by the Treasury last week. Finance Minister Pravin Gordhan had also mentioned the issue in his 2013-14 budget speech.