National government has proposed that sanitary pads, white bread flour and cake flour be included in the basket for zero-rated items, which will be effective from April 1, 2019.
This follows an independent panel of recommendations made by previous Finance Minister, Nhlanhla Nene.
The recommendation included implementing zero tax on white bread, sanitary products, school uniforms, nappies, cake flour and bread flour.
The panel who made the decision is chaired by Ingrid Woolard, and was tasked to review the current basket of 19 items. This was done to consider the most effective way to lessen the negative impact of the Value-Added Tax (VAT) increase on the country’s low-income households.
The National Treasury warned that there was little room for adjustments to tax policy medium-term budget policy statement (MTBPS) – effectively this means that there will not be any further tax increases for this financial year.
Lobby groups have also put pressure on government to add chicken and poultry products to the zero-rated items.
New Finance Minister, Tito Mboweni, has also added that no additional taxes are proposed for the time being.
“The consolidated deficit, which includes national government, public entities and social security funds, is projected to narrow from 4.2% of GDP in 2019/20 to 4% of GDP in 2021/22,” he said.