Cut the cabinet to just 25 – Tito
Zero VAT on flour, sanitary pads
In a victory for the plight of poor and mostly rural young women‚ the government will abolish the payment of Value-Added Tax (VAT) on sanitary pads.
And consumers will also no longer pay VAT on white bread flour and cake flour with effect from April 2019. This was announced by finance minister Tito Mboweni in parliament when he presented his maiden Medium Term Budget Policy Statement yesterday, outlining the government’s spending priorities for the next three years. Mboweni said, at this stage‚ the government was not planning any further tax increases‚ but he cautioned that the fuel levy was likely to continue rising in the next three years – which means high petrol prices are not about to go away any time soon. Research has shown that, on average‚ a female spends at least R600 per year on sanitary towels.
Government has been under pressure to zero-rate the product after it increased VAT by 1% from 14 to 15% in April. “I received 3 299 tweets in total,” Mboweni said. “One of them is from Tintsi Ngwenya in Johannesburg who said ‘Sanitary pads should be tax free’.”
Mboweni said the government was prepared to zero-rate the three items despite an estimated R1.2bn loss in revenue. “Earlier this year‚ a panel of experts was commissioned to investigate mitigating the effect of the VAT rate increase on low-income households. The panel suggested that six items be considered for zerorating‚ while pointing out that targeted expenditure would be more effective in helping lowincome households.
“In response‚ government proposes to zero-rate white bread flour‚ cake flour and sanitary pads from April 2019.”
Mboweni also introduced a R14.7bn grant structure to improve infrastructure at informal settlements and a R1bn housing subsidy to support middle and low-income home buyers. Mboweni announced that major sectors such as education, health and social development would receive the largest allocation of the budget.
He said addressing urgent and pressing matters in education and health were among President Cyril Ramaphosa’s five priorities. “Nobody should learn in a school that is unsafe. “Our children should have access to adequate sanitation. We have committed to eradicating pit latrines at schools,” he said. “We are immediately reprioritising R350m to recruit in excess of 2 000 health professionals into public health facilities. We are further reprioritising R150m to purchase beds and linen.” Mboweni also called for the officials involved in the corruption at Limpopo’s Giyani water project to be brought to book, adding that Ramaphosa would visit the area to find out what caused the project to collapse.