PRETORIA, The Cabinet is considering expanding the list of basic goods which will be zero-rated following the increase in South Africa's Value Added Tax (VAT) from 14 per cent to 15 per cent as announced in the 2018 Budget presented in Parliament last week by former Finance Minister Malusi Gigaba.
While welcoming the confidence expressed in the 2018 Budget, the Cabinet, at its meeting this week, said it is looking at the possibility of adding additional items to the list of VAT-exempted goods. The VAT currently includes 19 basic food items which are zero-rated.
These include basic items such as dried beans, maize meal, rice, brown bread, vegetables, fruits, vegetable oil, mealie rice, edible legumes and pulses, eggs, milk, dairy powder blend, cultured milk and milk powder.
As a response to the concern raised on the VAT increases proposed, the Cabinet is considering expanding the list of basic goods that are zero-rated on VAT, said new Communications Minister Nomvula Mokonyane on Thursday.
Briefing the media here following the first Cabinet meeting held after President Cyril Ramaphosa was sworn in on Feb 15, new Communications Minister Nomvula Mokonyane said the issue of VAT was raised at Wednesday's Cabinet meeting.
What was actually raised is that we definitely need to reflect but also unpack and give more clarity around the issues of VAT. One of the key considerations is the addition of items that must be zero rated, said Mokonyane in response to a question.
Mokonyane, who was appointed to the Communications portfolio following a Cabinet reshuffle on Monday, called on all South Africans to partner with Government to grow the economy and create much-needed jobs.
The Cabinet said the reduction in expenditure of 85 billion Rand (about 7.16 billion US dollars) over the next three years demonstrated the government's commitment to fiscal consolidation and the prudent allocation of resources to grow the economy.
The steps announced to slow the pace of debt accumulation and contain the budget deficit greatly improve our fiscal framework and give South Africans confidence in the future prospects of our economy, she said.
Source: NAM News Network