A report by Wits University has recommended eight new items for the Zero-Rated VAT list which will help alleviate the pressure on the poor.
Wits University released a report shortly before the 15% VAT increase took place to discuss what a VAT increase would do for South Africa and some of its poorest residents. Unfortunatly, the increase really does affect those who have much less disposable income to work with.
Part of their report assessed the need to expand the listed items on the zero-rated VAT list. The list currently has 19 items, all of which are classed as neccessities for the poor.
The list is currently made up of the 19 items below:
- Brown bread
- Maize meal
- Samp
- Mielie rice
- Dried mielies
- Dried beans
- Lentils
- Pilchards in tins
- Milk powder
- Dairy powder blend
- Rice
- Vegetables
- Fruit
- Vegetable oil
- Milk
- Cultured milk
- Brown wheaten meal
- Eggs
- Edible legumes
The report also recommended the addition of 8 new items, which would help make the 15% increase more managable. These items are regularly used by the poor.
“The list of zero-rated items (products upon which VAT is not charged) should be increased targeting goods bought by the poor such as: bread, poultry, flour, candles, soap, basic medicines, pay-as-you-go airtime and education-related goods. While this will also benefit higher-income earners the share of disposable income spent on these goods by the poor is higher.” – Dr Gilad Isaacs, Director of the Corporate Strategy and Industrial Development (CSID) Research Programme, Wits University
BusinessTech reported that the National Treasury has set up a panel of experts to consider and review the country’s current list of zero-rated VAT items. The panel has already confirmed that the 19 items currently on the list, will remain zero-rated. The panel is said to release their first lot of findings on the 30th of June 2018.
It is important as a country to create a constructive conversation around this topic and make sure that the National Treasury hears the voices of the people in need.
We decided to do a poll on our Good Things Facebook Group and the results have been pretty astounding. We listed the 8 items recommended by Dr Gilad Isaacs and asked our readers to vote for the ones they felt were most important. At the time of writing this, basic medicines and education-related materials were topping the poll. However many people felt that it was important to zero-rate all 8 items.
Additionally we asked them to list any items they felt should be zero-rated and most commenters felt unannimous about basic health care items such as:
- Sanitary Products for women
- Formula & Nappies for babies
- Meat
What are your thoughts? Which items do you feel should be zero-rated? You can vote in the poll here or leave your answer in the comment section.
by 