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Sikhulekelani Moyo, [email protected]

THE Ministry of Finance, Economic Development and Investment Promotion has proposed exemption of value added tax (VAT) on sale of live animals to restore demand for meat at the same time promoting formal trade in the livestock sector.

During the 2024 National Budget presentation late last year, Minister Mthuli Ncube announced that standard VAT increased to 15 percent from 14,5 percent effective January 1, 2024.

This has seen an increase in prices of meat products as producers were trying to cope with the VAT demands.

In his 2024 Midterm Budget and Economic Review Statement , Prof Ncube said following the recent changes in Value Added Tax (VAT) legislation, where live animals and meat is now standard rated, the industry has experienced a decline in demand due to low disposable incomes, which is attributed to the El Nino induced drought and increased informalisation.

“In order to encourage formal trade, thus restoring demand for meat products, I propose to exempt live cattle, pigs, goats, sheep and bovine semen from VAT,” said Prof Ncube.

“Furthermore, I propose to exempt poultry meat and kapenta from VAT.”

The 2024 National Budget brought in different tax initiatives, which were meant to generate revenue for the country as well as protecting local value supply chains.

The measures came into effect on January 1, with Statutory Instruments being put in place to enforce new measures.

From there, businesses started implementing the new measures in line with the National Budget provisions.

@SikhulekelaniM1