Zero rated supplies are taxable supplies of goods and services that are taxed at the rate of zero percent. Zero rating is the only true way to ensure that goods are provided free of Value Added Tax (VAT). A registered operator who supplies zero-rated goods or services is allowed to claim input tax credit in relation to that supply. Zero-rated supplies are specified in the VAT Act and include:-

  • Basic food stuff such as mealie meal, sugar, milk, meat, salt, bread, etc.
  • Agricultural inputs such as fertilizer, seeds, pesticides, animal feed, animal remedy, plants, tractors etc.
  • Exported goods.

A registered operator applying a rate of 0% on any supply of goods and services must obtain and retain documentary proof of his entitlement to apply the zero rates.

Exempt supplies are supplies of goods and services that are not subject to VAT at all. VAT incurred on goods and services acquired to make exempt supplies shall not be claimed as input tax credit. Traders who exclusively provide exempt supplies are not required to be registered for VAT purposes.

The list of exempt products includes certain basic necessities like medical services, educational services, rentals from residential properties, transport of fare-paying passengers, water for domestic use, electricity for domestic use, fuel, etc.

Goods previously zero rated but now standard rated

Statutory Instrument 1 of 2010 (Value Added Tax [Amendment] Regulations, 2009 [No. 26]) was gazetted with effect from 1 January 2010 in order to streamline and reduce the number of zero rated items. Following the amendment, the items in the table below are now taxable at 15%. 

Commodity Code

Description of Goods                    

 
 

0405.1000

– Butter

 

0802.1100

– Almonds:– In shell

 

0802.1200

– Almonds:– Shelled

 

0802.2100

– Hazelnuts of filberts (Corylus spp.):– In Shell

 

0802.2200

– Hazelnuts of filberts (Corylus spp.):– Shelled

 

0802.3100

– Walnuts:– In shell

 

0802.3100

– Walnuts:– Shelled

 

0802.4000

– Chestnuts (Castanea spp)

 

0802.5000

– Pistachios

 

0802.6000

– Macadamia nuts

 

0802.9000

– Other nuts

 

1008.9000

– Other Cereals

 

1517.1000

– Margarine excluding liquid Margarine

 

2008.1100

— Ground nuts (Peanut Butter)

 

        3301.9010

 

Lotions

 

3306.9000

Toothpaste

 

3926.2000

Gloves

 

4015.1910

Gloves

 

4015.1990

Gloves

 

6201.1110

Raincoats

 

6201.1210

Raincoats

 

6201.1310

Raincoats

 

6201.1910

Raincoats

 

6202.1110

Raincoats

 

6202.1210

Raincoats

 

6202.1310

Raincoats

 

6401.9200

Gum boots