Treasury loses out on more than R1bn in VAT from drought-stricken farmers
27 November 2018
The government has lost out on more than R1bn in VAT from drought-stricken farmers who were forced to cut production after their irrigation water from the Cape supply dams was radically reduced a year ago.
Agri Western Cape CEO Carl Opperman said on Monday this was one of the facts he presented to Water and Sanitation Minister Gugile Nkwinti when they met to discuss the impact of water cuts.
"We put it in monetary terms. This is only the loss from VAT, and excludes the losses to the National Treasury from farmers' income taxes," Opperman said.
Agri Western Cape calculated that the VAT loss from the R5.9bn of lost fruit production was R890m. The VAT loss from wine was R45m and the loss from livestock was R237m, amounting to a total of R1.172bn.