Eggs Added to List of Zero-Rated Goods

Cabinet on July 28 approved the exemption from Value Added Tax (VAT) of eggs, adding to the growing list of zero-rated agricultural inputs and basic commodities, the Minister of Finance and of Development Planning, Mr. Timothy Thahane,  has announced.

Mr. Thahane said “Cabinet’s decision underlines Government’s intention to bring the exempt and zero-rated goods covered by the VAT Act in line with those in South Africa." The move would also undercut the smuggling of eggs from South Africa where they are VAT exempt, which had made it difficult for local producers to compete against the consequently cheaper SA product.  

Other goods will be considered when the financial situation permits, Mr. Thahane said, leading to speculation that other goods such as canned fish and cooking oil, reported some of the other smuggled goods, may be next to be zero-rated. " Of course, priority will always be given to those goods which are produced locally and consumed by the poor,” the Minister said.

He said this represents commitment by Government to ensure that goods produced locally and which are used by the poor, will be exempted progressively from VAT, particularly when the goods compete with those which are zero-rated in South Africa.”

The Minister said he expected the retail price of eggs to come down now the  previously imposed 14% VAT has been abolished.  

29 July 2004