Treasury calls for public's input on adding items to zero-rated VAT list

2018-05-17 18:00
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National Treasury called for the public to make submissions by May 24 to its expert panel regarding adding items such as sanitary towels to the zero-rated Value Added Tax (VAT) list.

Representatives from Treasury updated the multi-party women's caucus on Thursday on the processes around the consideration of extending the current list beyond 19 items.

The multi-party women's caucus wants sanitary pads to be free of VAT, arguing they are a basic need for every woman, especially those who are poor.

Some past studies have indicated that poor girl pupils can miss up to 50 days of school a year because they cannot afford sanitary pads and therefore stay at home to avoid possible embarrassment. Other girls said they resorted to using newspapers and old rags during their periods. 

READ: Panel of experts to review list of zero-rated VAT items

A Treasury official explained to MPs that an expert panel, set up on February 25 following former finance minister Malusi Gigaba's budget speech, was calling for submissions before May 24.

"When we presented the Rates Bill in Parliament in February, a few civil organisations presented [their concerns] to Parliament on the VAT increase from 14% to 15% effective April 1," MPs heard.

Independent panel

"Due to that, on February 25, the minister of finance announced an independent panel of experts to review the current list of zero-rated items. Currently, it is only 19 food items that are on the list.

"There is a call for written submissions, and the closing date is May 24. Therefore, individual civic organisations and even you as MPs may make written submissions on the issue of sanitary towels.

"Please make written submissions to the independent panel. The panel, after [it] considers all the submissions, will make a written recommendation to the minister of finance round about June."

The panel is independent and Treasury does not have access to the submissions, as Treasury has a vested interest in the situation, MPs heard.

Those wanting to make submissions can find instructions on Treasury's website, or send an email to vatsubmissions@treasury.gov.za by close of business on May 24.

Preference given to women-led small businesses

MPs wanted Treasury to improve its communication methods as women in rural areas would not have access to the website, and select radio stations only reach certain regions.

MPs were also concerned about businesses cashing in on the future potential of a free sanitary pad system – a separate issue currently under consideration.

The Department of Women, in conjunction with a ministerial task team, is still finalising a policy framework around making government-issued sanitary pads free to the public.

The issue has stalled multiple times since former president Jacob Zuma first made the declaration in 2011.

Small Business Development Minister Lindiwe Zulu on Thursday admitted to the caucus that "many corporates were asking for funding for the machine that makes sanitary pads".

However, she said that when the outstanding policy framework is eventually finalised her department would ensure that business goes to small businesses led by women.

"We can say as a department, we will only give to women. It's how we do it that will help us get it done. But stopping people from creating businesses will be very difficult."

The South African Bureau of Standards was ultimately responsible for the quality of the pads eventually produced, she added.

Zulu also agreed that the call for submissions should be communicated on TV and on radio stations, including community radio stations, to reach the core citizens in need.

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