The supply of goods or services in terms of the government’s national housing programme qualifies for VAT at the zero rate in terms of s8(23) read with s11(2)(s) of the VAT Act. The zero rating was repealed by the Taxation Laws Amendment Act, 2015 with effect from 1 April 2017.
However, it was announced in the 2017 Budget Review that the repeal of the zero rating of these supplies will be postponed for two years to 1 April 2019 because neither National Treasury nor the municipalities are ready to implement change. Sections 8(23) and 11(2)(s) were therefore reinstated.
It has now been proposed that the effective date of the repeal of the zero rating of supplies in terms of the national housing programme be postponed indefinitely, until the effective date of the change is published by the Minister in the Government Gazette.