Policies on relief measures under the spotlight

22 Nov 2023

Government has implemented a number of policies to directly benefit lower-income households through spending.

The deputy minister of finance, Dr David Masondo, declared this during a mini plenary debate on relief measures, including expanding the zero-vat-rated food basket.

The deputy minister added that implementation of the policies follows the recognition that “zero-rating is not well targeted”.

“We do not think additional VAT zero-rating of several food items is the best instrument to address the problem of the high cost of living”, he said.

He pointed out that “education and health budgets are progressive, and the extensive grant system of old age grants, the child support grant, and the disability grant provide cash to households who are most in need”.

The deputy minister also indicated that the social relief of distress grant is another new mechanism that the government has used to provide relief.

“This a better approach than zero-rating where so much of the benefit goes to higher earners and where companies may not even pass on the benefits to consumers”, he said.

“Targeted cash transfer to the poor is better and more redistributive as opposed to VAT which benefits mostly high-income earners”, he added.

Government is focused on driving structural reforms in the economy.

“The ultimate goal is to increase growth and create more jobs where households will have higher incomes, be less dependent on the state, and will be able to withstand temporary shocks to prices”, the deputy minister declared.

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(This article is provided for informational purposes only and not for the purpose of providing legal advice. For more information on the topic, please contact the author/s or the relevant provider.)