DA to fight for VAT concession in agri-sector

28 August 2014

The DA will seek a meeting with Treasury representatives and the Acting Commissioner of the South African Revenue Service (SARS) ,Ivan Pillay, to discuss Treasury's proposal to do away with value-added tax (VAT) concession for the agricultural sector through the Taxation Laws Amendment Bill.

The proposed amendments will see the zero-rating of goods for agricultural, pastoral and farming purposes removed due to fraudulent claims committed by a limited number of members within the sector. 

The DA has already made submissions to the Standing Committee of Finance that the VAT zero rating for farmers must be retained which indeed received wide support. 

If the VAT concession is withdrawn it could have far-reaching consequences for the rural economy. It will affect the viability of certain farming enterprises and has the real possibility of leading to job losses in rural areas. 

The DA therefore calls on treasury to conduct a regulatory impact assessment of this proposal in order to make a better-informed decision. 

Instead of introducing reforms that would blindly punish all farmers, the DA would advise that SARS needs to become better capacitated in detecting and investigating instances of fraudulent activities by vendors through the verification and audit of VAT 103 certificates and VAT 201 forms in conjunction with organised agriculture.

As it currently stands the Taxation Laws Amendment Bill would only damage the agricultural sector by raising production costs and acting as a roadblock to job creation and rural economic development. 

Government must act to ensure that it introduces legislation that creates jobs instead of hampering growth. 

Statement issued by David Ross MP, DA Shadow Deputy Minister of Finance, August 28 2014

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