Top 5 on Fin24: Treasury open to reviewing zero-rated VAT items, petrol price drops


Cape Town – A roundup of Friday’s must-read financial and economic news.

Treasury open to reviewing zero-rated VAT items

Treasury plans to take a collaborative approach in the consideration of goods to be added to the list of items zero-rated on value-added tax (VAT), Parliament has heard.

National Treasury on Friday responded to the public inputs of Budget 2018 at Parliament. Treasury deputy director general on tax and financial sector policy Ismail Momoniat spoke on the potential of reviewing the list of zero-rated items.

Over the past week since Budget 2018, civil society groups and unions have criticised the increase in the VAT rate for adding to the burdens of the poor. Among the suggestions by these bodies include expanding the list. Cabinet on Thursday also issued a statement indicating it is considering expanding the list of basic goods zero-rated on VAT.

More relief at pumps for motorists

petrol pumps

Motorists will get some relief at the pumps for March, with the pump price of petrol dropping 36 cents a litre, the Department of Energy (DoE) said on Friday.

The decrease comes into effect on March 7. Among the reasons given by the DoE is that the average international product prices of fuels – petrol, diesel and illuminating paraffin – decreased. 

The rand strength was also a contributing factor, with the exchange rate between February 2 and March 1 being an average of R11.82 to the greenback, compared to the R12.20/$ of the previous period.

Gupta-linked Bank of Baroda holds ‘proceeds of crime’ – NPA lawyer

The Bank of Baroda SA has been in possession of the “proceeds of crime” linked to a dairy farm project that involved the politically connected Gupta family, said Thato Ntimutse, a lawyer for the National Prosecuting Authority’s Asset Forfeiture Unit.

While India’s Bank of Baroda has tried to stop the state from freezing R30m of its funds over the Vrede dairy farm dispute, it should be noted that the lender has gone so far as to take its own clients, the Guptas, to court to try and sever ties, Ntimutse said in the High Court in Bloemfontein on Friday.

Although state funds intended for the farm may also have gone through other banks in South Africa, Bank of Baroda has a single current account into which all funds are paid so that legal and illegal money co-mingles, he said.

Markus Jooste conspired with other Steinhoff execs

Steinhoff International Holdings’ former chief executive officer Markus Jooste conspired with fellow executives at the retailer to move revenue figures around subsidiaries to boost their balance sheets, according to Süddeutsche Zeitung.

Jooste, who quit in December after the company reported accounting “irregularities”, discussed how to manipulate accounts for the 2014 fiscal year, the German newspaper said, citing internal emails.

The ex-CEO has been referred by Steinhoff to an anti-corruption police unit in South Africa, where the retailer is based, while auditors at PwC are investigating the company’s accounts.

SARS must take some blame for revenue shortfall – Treasury

The tax revenue gap is not only due to the poor economic cycle as SARS has asserted, but also due to administration and governance issues at the tax authority, Parliament heard.

At a briefing by National Treasury on the public inputs of Budget 2018 at Parliament on Friday, Treasury’s deputy director general on tax and financial sector policy Ismail Momoniat addressed the issue of the revenue gap.

At the Budget Speech last Wednesday, former finance minister Malusi Gigaba said the revenue shortfall was projected to be R48.2bn.

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