Increasing zero VAT items 'doesn't help poor'

While the minister of finance made a big deal of adding to the basket of zero-rated VAT items in budget 2025, an expert says these items do not help low-income consumers.

- Ina Opperman

At the opening of parliament in July last year, President Cyril Ramaphosa said the government of national unity (GNU) will look to expand the basket of essential food items exempt from VAT and undertake a comprehensive review of prices.

Subsequently, politicians, members of parliament, trade unions, the South African Poultry Association and the Red Meat Producers Organisation all called for the expansion of the list of zero-rated foodstuffs.

Gerhard Badenhorst, director for tax and exchange control at law firm Cliffe Dekker Hofmeyr, said the 2024 National Food and Nutrition Security Survey indicated that 3.7 million households in South Africa reported inadequate or severely inadequate access to food.