The Citizen reports that Finance Minister Enoch Godongwana announced on Wednesday when delivering his third budget speech this year that the zero-rated food basket will no longer be expanded.
Scrapping the expansion of the zero-rated food basket follows the decision not to implement a 0.5% increase in the value-added tax (VAT) this year and next. In his second budget speech delivered on 12 March 2025, Godongwana announced that the zero-rated food basket would be expanded to alleviate pressure on already struggling South Africans. The list included edible offal from sheep, poultry, goats, swine, and bovine animals; specific cuts such as heads, feet, bones, and tongues; dairy liquid blends; and tinned or canned vegetables. However, in the third budget speech, the minister indicated that “the expansion of the zero-rated basket, which was included to cushion poorer households from the VAT rate increase, falls away.” The minister also announced an additional R7.5 billion over the Medium-Term Expenditure Framework (MTEF) to increase the effectiveness of the SA Revenue Service (Sars) in collecting more revenue. Godongwana once again did not adjust personal income tax brackets for inflation, which is expected to generate an additional R15.5 billion in revenue in the 2025/26 fiscal year. By not adjusting tax brackets to keep pace with inflation, the government is allowing allows a phenomenon known as ‘bracket creep’ to occur.
- Read the full original of the report in the above regard by Tshehla Cornelius Koteli at The Citizen
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