MEDIA RELEASE

19 March 2018

Stats SA to ensure VAT change reflected in CPI

The VAT increase to 15% on 1 April will affect the price of many of the items in the Consumer price index (CPI) basket. Retailers and service providers may adopt different approaches and timeframes to pass this increase onto their customers. Stats SA surveys actual prices during the compilation of the CPI, irrespective of how these prices were determined.

Not all products in the CPI basket are surveyed every month. This is because prices for many products and services do not usually change every month and spreading the collection assists in managing the workload of the price collection team. A schedule of periodic collections is shown in each monthly CPI release. It has always been Stats SA’s policy to conduct additional surveys when we become aware of unscheduled price changes.

Stats SA will undertake additional surveys in April and May and make automatic adjustments to selected prices to capture as much of the impact of the VAT increase as possible.

1. Automatic adjustments will be made to the municipal tariffs to account for the increase in VAT.

2. Special surveys of the following categories will be made:
   • Short-term insurance will be surveyed in April and May 2018 and then according to the regular schedule;
   • Private medical practitioners and hospital costs will be surveyed between April and October 2018 and then in February 2019 according to the normal schedule;
   • Toll fees will be surveyed in April or May (instead of March) depending on the timing of implementing new tariffs.

As Stats SA obtains information from additional service providers, further products may be surveyed or adjusted.

Zero-rated and VAT-exempt items comprise 43,5% of the headline CPI basket which includes 5,5% of food expenditures. A detailed list of the products and their weight in the headline CPI is available on the Stats SA website (www.statssa.gov.za/?page_id=2528).

Weight (out of 100) of headline CPI basket items zero-rated for VAT or exempt from VAT

For media enquiries contact:
Lesedi Dibakwane

012 310 8578

082 805 7088

LesediD@statssa.gov.za

For further information please contact: