Government of National Unity to expand list of tax-exempt food items

As South Africa struggles with high poverty rates and rising living costs, the Government of National Unity (GNU) plans to broaden the range of essential food items exempt from value-added tax (VAT).

President Cyril Ramaphosa announced on Thursday that the GNU will undertake a comprehensive review of administered prices, including the fuel price formula, to identify areas where prices can be reduced.

THREE STRATEGIC PRIORITIES

The president said the 10 GNU parties have resolved to dedicate the next five years to actions that will advance three strategic priorities.

These include driving inclusive growth and job creation, reducing poverty and tackling the high cost of living, and building a capable, ethical and developmental state.

The Head of State believes that a robust and inclusive strategy to alleviate poverty is essential to safeguard and assist the most vulnerable 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 delivered his Opening of Parliament Address (OPA) in Cape Town, outlining the government’s agenda, priorities, and policies for the next five years during a joint sitting of the two newly constituted Houses of Parliament.

INCOME TO SUPPORT THE UNEMPLOYED

The government has implemented various interventions to support the unemployed, including the introduction of the Social Relief of Distress (SRD) Grant during the Covid-19 pandemic, said the president.

“The SRD Grant has provided a lifeline to millions of unemployed people.”

He announced that the state would use this grant as a basis for introducing a sustainable form of income support for unemployed people to address the challenge of income poverty.

“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 acknowledged the impact that a well-functioning and quality education system has on both reducing poverty and driving inclusive economic growth.

ASSET POVERTY

In addition, President Ramaphosa said asset poverty was one of the underlying causes of abject poverty, which exacerbates the high cost of living among people.

“The provision of title deeds for land and subsidised housing provides people with assets that they can use to improve their economic position.

“Income poverty is also one of the underlying causes of poverty,” he added.

The most effective way to address poverty is by ensuring that people have access to jobs. 

To create more jobs for South Africans, he said the seventh administration will focus on processing minerals so that the country exports finished products rather than raw commodities.

“We will pursue a smart industrial policy that focuses on the competitiveness of our economy, and that incentivises businesses to expand our exports and create jobs. 

“We will continue to work with stakeholders to develop and implement Master Plans to grow important industries, increase investment, create jobs and foster transformation.

“We are convinced that small businesses and the informal sector hold the greatest potential for inclusive growth and job creation,” said the president.