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VAT exemption for 'essential goods'

for the duration of the lockdown

27 March 2020

SARS has changed the definition of ‘essential goods’ as per the Disaster Management Act 57 of 2002, and the Regulation R.398 in Government Gazette No 43148 of 25 March 2020. These Regulations will apply as from 26 March 2020 at 24H00 until 16 April 2020 at 24H00, or on a date to be determined by the Cabinet member designated under section 3 of the Disaster Management Act.”

The Regulation is part of government strategy to provide relief to business that supply ‘essential goods’ to combat the virus. The Regulation is instituted to improve the cash position of the business importing the ‘goods’ listed below. The business importing these ‘ essential goods’ would not have to pay VAT.

However, when the same imported ‘essential goods’ are resold locally, then the normal VAT rules apply. So, the importer will charge output to its customers. This is a cash flow timing concession which implies that instead of the importer paying VAT on import and claiming it back against the VAT charged on sales, the importer simply pays over the full VAT on sales.

The ‘essential’ goods required to combat the virus could result in an increase demand for the importation of these goods; the Regulation grants VAT exemptions and a full customs rebate for the period cited above.

It is important to note that these exemptions applies to importation of ‘essential goods’ and currently, the Minister of Trade and Industry is developing regulation restricting the exportation of ‘essential goods’ as defined below.

Below is a full list of essential goods and services as per the cited regulations.

Regulation 11A


1. Food

(i) Any food product, including non -alcoholic beverages;
(ii) Animal food; and
(iii) Chemicals, packaging and ancillary products used in the production of any food Product

2. Cleaning and Hygiene Products

(i) Toilet Paper, sanitary pads, sanitary tampons, condoms;
(ii) Hand sanitiser, disinfectants, soap, alcohol for industrial use, household cleaning products, and personal protective equipment; and
(iii) Chemicals, packaging and ancillary products used in the production of any of the above.

3. Medical:

(i) Medical and Hospital Supplies, equipment and personal protective equipment; and
(ii) Chemicals, packaging and ancillary products used in the production of any of the above.

4. Fuel, including coal and gas
5. Basic goods, including airtime and electricity.


Categories of essential services shall be confined to the following services:

1. Medical, Health (including Mental Health), Laboratory and Medical services;

2. Disaster Management, Fire Prevention, Fire Fighting and Emergency services;

3. Financial services necessary to maintain the functioning of the banking and payments environment, including the JSE and similar exchanges, as well as Insurance services;

4. Production and sale of the goods listed in category A, above;

5. Grocery stores, including spaza shops;

6. Electricity, water, gas and fuel production, supply and maintenance;

7. Critical jobs for essential government services as determined by Head of National or Provincial Departments in accordance with the guidance by the DPSA, including Social Grant Payments;

8. Birth and death certificates, and replacement identification documents;

9. Essential municipal services;

10. Care services and social relief of distress provided to older persons, mentally ill, persons with disabilities, the sick, and children;

11. Funeral services, including mortuaries;

12. Wildlife Management, Anti -poaching, Animal Care and Veterinary services;
13. Newspaper, broadcasting and telecommunication infrastructure and services;

14. Production and sale of any chemicals, hygiene products, pharmaceuticals for the medicalor retail sector;

15. Cleaning, sanitation, sewerage, waste and refuse removal services;
16. Services related to the essential functioning of courts, judicial officers, the Master of the High Court, Sheriffs and legal practitioners required for those services;

17. Essential SARS services defined by the Commissioner of SARS;

18. Police, peace officers, traffic officers, military medical personnel and soldiers, correctional services officials and traffic management services;

19. Postal services and courier services related to transport of medical products;

20. Private security services;

21. Air -traffic Navigation, Civil Aviation Authority, Cargo Shipping and dockyard services;

22. Gold, gold refinery, coal and essential mining;

23. Accommodation used for persons rendering essential services, quarantine, isolation and the lockdown;

24. Production, manufacturing, supply, logistics, transport, delivery, critical maintenance and repair in relation to the rendering of essential services including components and equipment.

25. Transport services for persons rendering essential services and goods, and transportation of patients;

26. Services rendered by the Executive, members of Parliament, Members of the Provincial Legislature, Members of Local Councils, the Judiciary, traditional leaders and National Office Bearers. of Political Parties represented in Parliament;

27. Commissioners of the South African Human Rights Commission, Gender Commission,and the Commission for the Promotion and Protection of the Rights of Cultural, Religious and Linguistic Communities, and the Public Protector and Deputy Public Protector; and

28. Transport and logistics in respect of essential goods as set out in A above to neighboring countries.

SAIPA – 1st day of shutdown
27 March 2020 at 14.00