Shoprite says it will provide its customers with SA’s first #TaxFreePad. Photo: Bloomberg
CAPE TOWN - Shoprite said that the company will provide its customers with SA’s first #TaxFreePad. 

The low-cost retailer announced earlier this week that it would be selling "tax-free" sanitary pads at R10.99.

Ultrex pads at Shoprite will not be subjected to the VAT of 15 percent and is part of the company's "sanitary pad subsidy".

Shoprite said that they will be offering the  Ultra Plus range and the  Ultra Slim pads for  R10.99 and that the offer is not a promotion but will run  indefinitely.

"This is not a short-term promotion, but a commitment by Shoprite to provide its customers with greater access to affordable basic hygiene products and necessities," the statement said.

The  Ultra Plus range comes in a pack of 10 and the slim pads come in a pack of 12. 


VAT PANEL

In early August, a 'VAT panel' recommended a zero-rating on a number of additional items.

The Finance Ministry said the panel recommended that white bread, flour, school uniforms, nappies and sanitary towels should be made zero-rated items.

"The panel further recommends that government should expedite the provision of free sanitary products to the poor and that the zero-rating of school uniforms be done only if they can be separated from general clothing," National Treasury said.

It added that, for each of the recommended items, the panel suggested that the treasury did further investigations to "ensure that the benefits of zero-rating accrue to consumers and are not captured by producers".

The panel was appointed by the finance ministry after VAT was increased from 14 to 15 percent in April, after it was announced in the national budget tabled in February with a view to putting an additional R22.9 billion into the state's coffers in the 2018/19 financial year.

It was mandated to evaluate the list of zero-rated items, consider the addition of further items to the list and consider other measures to mitigate the impact of the increase on poor households.

There are currently 19 items that are zero-rated for VAT.

Zero-rating white bread would amount to a total saving of R812 million to poor households, according to the panel's calculations, while zero-rating school uniforms would provide relief to the same category of the population to the tune of about R400m.

The panel said in its report, which was handed to the finance ministry on Monday, that it must be considered whether the poor would not be more effectively shielded from the impact of the VAT hike by specifically targeted government expenditure measures. 

"In theory, it would be cheaper to return the cost of the VAT increase to the poorest households than to extend the zero rating."

- BUSINESS REPORT ONLINE