A nine-person panel will be convened to review which products will be excluded from VAT, headed by the dean of the factulty of commerce and the University of Cape Town, Professor Ingrid Woolard, TimesLive reported. The VAT increase of one percentage point announced in February's budget came into effect on April 1.
There were many calls for government to reconsider the basket of items exempt from VAT to cushion the impact of the increase on poor households.
Finance Minister Nhlanhla Nene reportedly said the current zero-rate list would be reviewed and the panel would "consider the most effective way to mitigate the impact of the increase in the VAT rate on poor and low-income households".
"The review will consider expanding the list of basic items that are VAT zero-rated‚ and consider how specific expenditure programmes can be improved to better target poor and low-income households. Whilst the focus of the panel will be on food items to be included for zero-rating‚ it will also identify any other items that should be considered to achieve the policy intention of providing relief for poor and low-income households‚" Nene reportedly said in a statement on Tuesday.
Business Day reported in March that Cabinet was considering putting together the task team to look at possibly expanding the list of VAT-exempt goods.
This followed opposition to the VAT increase from across society, including the tourism industry, unions, opposition parties and civil society groups.
Cosatu threatened mass action if the basket of zero-rated items is not increased, according to a Fin24 report.
Eyewitness News quoted Communications Minister Nomvula Mokonyane telling the media at the time, "There were no timelines that were raised (in terms of establishing the task team) but what has been registered is that there is a team of ministers led by the department of finance that are going to be looking at the issues and the additional inputs that are being made."
Woolard is reportedly about to take up a position as the dean of economic and management science at Stellenbosch University.
According to TimesLive, the other members of Woolard's team are: economists Ayabonga Cawe‚ Professor Ada Jansen‚ Dr Thabi Leoka‚ Cecil Morden and Dr Neva Makgetla‚ as well as the national health department's Lynn Moeng‚ Sars tax manager Prenesh Ramphal and Wits University dean of commerce‚ law and management Professor Imraan Voladia.