Considering the rising cost of living in South Africa throughout 2023, some political parties have called to expand the zero-VAT-rated basket of food items in the country, but Minister of Finance Enoch Godongwana said this would do little to help those who need it. <\/p>\n\n\n\n
Currently, there are several food items that are zero-VAT-rated, including brown bread, maize meal, rice, vegetables, milk, vegetable oil, eggs and more. <\/p>\n\n\n\n
In a recent parliamentary Q&A, Godongwana was asked whether he would consider expanding the zero-VAT-rated food basket in South Africa as a direct intervention to fight the cost-of-living crisis that is notable by the upward-spiralling high food prices that are squeezing the average South African household. <\/p>\n\n\n\n
In response, Godongwana noted that while poorer households consume more zero-rated food items, studies have shown that affluent families benefit more from such an intervention.<\/p>\n\n\n\n
“My position has not changed since the last oral reply. As indicated then, zero-rating of specific foodstuffs provides a larger proportional benefit to the poor,” said Godongwana. <\/p>\n\n\n\n
“Overall, goods have a progressive impact and a strong equity-gain ratio \u2013 poor people consume a relatively high share of zero-rated items. <\/p>\n\n\n\n
“However, the analysis of the independent panel in 2018 indicated that extending zero-rating to further food items would be inefficient since high-income households tend to benefit more from such measures<\/strong>,” he added.<\/p>\n\n\n\n Food prices pinch<\/strong><\/p>\n\n\n\n The call to expand the country’s zero-VAT-rated basket of food items comes as many South Africans feel the pinch of food prices that have risen significantly over the past year. <\/p>\n\n\n\n