16 July 2008

Zero-rating food and books

I made a suggestion in the Reach Singapore group a week or two ago.

In the UK, certain items are zero-rated or exempted from VAT (Value-Added Tax, or GST in our parlance)

These items include food and books and more. Books, newspapers, magazines, talking books, printed music and maps VAT

Notice 701/10

Food for humans including meat, ready meals and cakes - but not food supplied for catering or hot take-aways, sweets including chocolate and other sweetened food, crisps, nuts and other savoury snacks, ice cream and cones, mineral water and other drinksVAT

Notice 701/14

In other words, Her Majesty's Government recognises that books are essentially for education and the uplifting of people. And HM government also recognises that food are essentials and in that sense, zero-rating food eases the burden of the people. Consumption like that of junk food, luxuries, snacks are taxed but basic staples are not. It sounds like a good idea to me. I hope the authorities will consider this aspect of the UK's implementation of the VAT.

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