Parliament told there are other options to help the poor than VAT zero-rating
Judge Dennis Davis says the rich benefit disproportionately from the zero-rated items
It is critical that the independent panel appointed to investigate the zero-rating of VAT examine other ways in which the poor can benefit from the approximately R23bn loss to the fiscus due to zero-rating, Judge Dennis Davis said in Parliament on Wednesday. This was because the rich benefited disproportionately from the current zero-rating of 19 food items. The panel, chaired by Prof Ingrid Woolard, will look into whether the proper items are zero-rated for the poor and whether the list should be extended to include other goods. One of its additional terms of reference is to explore whether the outcome of zero-rating of food items cannot be better achieved by a targeted government expenditure programme. Davis made a presentation to the standing committee on finance, which is holding a public hearing on the increase in the VAT rate from 14% to 15%. He said it was critical to question whether zero-rating was the most efficient way of getting the full amount of R23bn back to the poor,...
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