The VAT panel which the Treasury set up to look into ways of softening the impact of the first increase in the VAT rate 25 years, has recommended that more items be zero-rated. These items include white bread, bread flour and cake flour, sanitary products, nappies for babies and adults and school uniforms. If these recommendations are approved, it will cost the fiscus about R4bn in tax revenue, but provide tax relief of R2.8bn to 70% of the country’s poorest households. South African Revenue Service senior manager of tax research and development Prenesh Ramphal sat on the panel and spoke to Business Day TV about the recommendations.

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