PACSA letter to the Standing Committee on Finance on expanding the zero-rated basket to mitigate the effect of VAT
Expanding the basket of zero-rated foods has been contested on the basis of the following arguments:
- Expanding the basket may disproportionately benefit the rich (because rich or poor we share quite a few common foods).
- Selecting the new foods to be included in the zero-rated basket is incredibly complex as what foods are eaten, how foods are prepared and changing households purchasing patterns are all influenced by household specific and other complicated external variables. Even with the experience PACSA has around tracking food patterns and prices, there are just far too many variables in creating an expanded zero-rated basket that responds to the requirements of the working class and the impact on the larger economy. At best, we would be able to make an educated guess – but this hardly seems a sufficient response to the crisis we are in. Read full statement