CAPE TWON: Having increased the headline value-added tax rate to 15 percent from 14 percent on April 1, South Africa has appointed a panel to consider a review of the list of food items subject to the zero rate.
The panel has been asked to, first, evaluate whether the current list of 19 zero-rated food items achieves the objective for which they were implemented, including “examining the consumption patterns of low-income households as opposed to higher-income households and the benefits derived from the zero-rating by these households respectively.”
Second, it has been asked to consider “whether the policy objective underlying zero rating may be better achieved through disaggregation of those items (which are currently expressed as broad categories) to more specific targeting of products.”
A consultation has been launched on the review, which will run until May 11, 2018. The panel will present its recommendations to the Davis Tax Committee no later than June 20, 2018, and a final report will be submitted to the Minister for Finance on June 30, 2018.
