South Africa To Expand VAT Exemptions On Essentials To Reduce Costs

The government of National Unity (GNU) plans to expand value-added tax (VAT) exemptions on essential food items as the people of South Africa struggle with high poverty and living costs.

President Cyril Ramaphosa on Thursday announced that the GNU will review administered prices including fuel cost to find ways to lower them. He noted that the 10 GNU parties will focus on three main goals over the next five years.

These goals include driving inclusive growth and job creation, reducing poverty and tackling the high cost of living and building a capable, ethical and developmental State. Ramaphosa stressed that a strong and inclusive plan to fight poverty is crucial to help the most vulnerable people in society.

"Even at a time when many companies are making large profits, millions of South Africans are suffering as a result of rising prices," the president said, SA News reported.

He noted that the government has taken steps to help the unemployed such as introducing the Social Relief of Distress (SRD) Grant during the COVID-19 pandemic. "The SRD Grant has provided a lifeline to millions of unemployed people," he said.

The president announced that this grant will be used as a foundation for creating a sustainable income support program for unemployed people to tackle income poverty.

He added, "We must ensure that local governments properly implement the indigent policy so that the old, the infirm and the poor can get assistance with the payment of basic services. Importantly, we will link social assistance with other forms of support to lift people out of poverty."

He further shared that a good education system is crucial for reducing poverty and promoting economic growth. The president also mentioned that lack of assets is a major cause of severe poverty, which makes living costs even higher for people.

"The provision of title deeds for land and subsidized housing provides people with assets that they can use to improve their economic position," he said. "Income poverty is also one of the underlying causes of poverty."

Ramaphosa insisted that the best way to fight poverty is to make sure people can get jobs. To create jobs, he promised that the government would focus on processing minerals so that South Africa could export finished products instead of just raw materials.