Skip to main content

Treasury to review and expand list of items zero-rated for VAT

| Economic factors

South Africa’s VAT rate increased from 14% to 15% on 1 April, and this has raised concerns on how this will impact the most vulnerable in the country.

To ensure the VAT hike is not regressive, the current list of 19 items will remain zero-rated, Treasury said, with the panel of experts considering expanding the list.

“The panel will also consider how specific expenditure programmes can be improves to better target poor and low-income households (eg National School Nutrition Programme, food stamps, etc),” it said.

The panel is expected to deliver its first report by 30 June 2018, in time to be included in draft regulations being compiled in July 2018.

The current list of zero-rated food items includes:

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

Other goods and services that are currently zero-rated for VAT include illuminating paraffin and goods which are subject to the fuel levy (petrol and diesel), and well as  certain government grants and education services.

Pin It

Related Articles

‘Desperation is the new normal’ for South Afric...

By: Opinion – IOL Business Report South Africans have been collectively waiting with bated breath for some small financial reprieve from the relentless price hikes of the past few years that have driven them to the brink of despair, chief among t...

SA retail sales up 2.3% in March

Stats SA reports that retail trade sales increased by 2.3% year-on-year in February 2024. The largest contributor to this increase was general dealers (6.4% and contributing 2.8 percentage points).

Massive tax increases to fund NHI – destroying ...

By: Shaun Jacobs – Daily Investor Funding the government’s National Health Insurance (NHI) scheme would require a 31% increase in personal income tax, or a 6.5% increase in VAT, or a ten times increase in payroll tax, threatening South Afric...

SA consumers’ disposable income eroded by high ...

By: Given Majola - IOL Business South African consumers’ disposable income was being eroded by persistently high interest rates and inflation (especially food inflation) while a lack of any meaningful economic growth was constraining their salaries.

Nearly half of South Africans struggle to affor...

By: Xolile Mtembu - IOL South Africans spend over one-third of their income on food, and growing costs have a significant impact on their finances.