DURBAN - The Minister of Finance, Nhlanhla Nene, has released the report by the Independent Panel on the evaluation of the current list of items that are zero-rated for public comment by August 31.
The Independent Panel was appointed by Nene after the increase in tax announcement by the in 2018 budget. VAT was increased from 14 percent to 15 percent that took effect from April 1.
In the report submitted to Nene, the panel recommended that the following items also be zero-rated: white bread, brown bread, and cake flour as well as sanitary products, school uniforms.
Nappies including cloth and adult nappies were also recommended for the zero-rated tax items.
The panel recommended that government speed up the process of providing free sanitary products to the poor and that the zero-rating of school uniforms be done only if they could be set aside from general clothing.
For each recommended item on the list, the panel suggested that the National Treasury does more work to ensure that the benefits of zero-rating accumulate to customers and are not snatched by producers.
The report also mentioned some programmes on the expenditure side that would help poorer households including strengthening of the National School Nutrition Programme or increases in the Child Support and Old Age Pension.
The mandate of the panel was to review the current list of zero-rated items and consider including the extra zero-rated items. The panel was supposed to look at other ways to mitigate the impact of the increase on poorer households.
The recommendations from the pane are subject to more public comment including comments during Parliamentary hearings. Taking the recommendations, the comments from the public and the evaluation of the recommendations by the National Treasury and the SA Revenue Service, Nene will then make a decision on which of the panel's recommendations to implement.
Some of the changes may appear in the draft tax legislation that is presently being processed by Parliament’s Standing Committee on Finance.
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