Capetonians have had to deal with many price hikes and added increases in the past few months – from the ever-increasing prices of fuel to the water delivery charges implemented by the City of Cape Town and a Value-Added Tax (VAT) hike, we have had our hands full and our pockets emptied.
The National Treasury has announced that its proposed list of new zero-rated products will be released at the end of July 2018.
The financial shocks began in February when VAT increased from 14% to 15% – for the first time in 25 years.
This contributed to how expensive the price of living in Cape Town is. It came as no surprise when the concerns raised by the public and civil organizations contributed to Minister of Finance, Nhlanhla Nene, announcing that a panel of independent experts would be appointed to review the current list of VAT zero-rated items.
The panel of independent experts would make their decisions under the Davis Tax Committee (DTC), a South African tax framework regulator.
The panel is led by Professor Ingrid Woolard, and will take into account the benefit for low-income households.
It was first expected that the panel would deliver an initial report by 30 June 2018, but this has been pushed back to the last day of the month,
Currently, there are 19 basic food items on the zero-rated list. Amongst others, it includes brown bread, maize meal and eggs.
Based on media predictions, items that could be considered include:
– Feminine hygiene products
– All bread (currently only brown bread is zero-rated)
– Some form of protein, most probably poultry
– Basic medicines
– School clothes and other education-related goods;
– Pay-as-you-go airtime