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Parliament mulls scrapping VAT on books

Zero-rating of VAT on books has edged closer to becoming a reality with Parliament asking the national treasury to report back on the implications of amending the budget to allow for the move.

Welcoming the move, the Democratic Alliance (DA) said in a statement on Monday that the 14% VAT on books was a “tax on learning and knowledge” and that the party had proposed earlier in 2010 that Parliament look into this.

Parliament’s portfolio committee on finance will consider whether the treasury’s report warrants amending the Value Added Tax Act.

“Such an amendment would remove one of the impediments to accessing books and make serious strides in combating illiteracy in our country. We need to understand that, for the same pro-development, pro-poor reasons that bread, milk and vegetables are zero-rated, we need to zero-rate basic learning material too,” DA spokesperson Dion George said in the party’s statement on Monday.

“Good education creates more opportunities for young South Africans and is the key doorway for the worst off citizens in our country to escape the conditions that would otherwise keep them and their children trapped in poverty.”

A zero VAT rating on books would affect government revenues, George said, but any negative effects would be offset over time by increased literacy of the population. The removal of the VAT barrier would encourage more people to buy books, increase literacy and education levels and eventually have a positive effect on South Africa’s economy, George said.

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