INNSCOR Africa (Innscor) says changes to the value-added tax (VAT) status of various basic foodstuffs from zero-rated to exempt significantly led to an increase in the cost of production during the quarter ended March 31, 2024.
Effective January 1, 2024, Statutory Instrument 248 of 2023 exempted VAT on essential food commodities including maize meal, rice, sugar, cooking oil, flour, and bread. This meant that the group could no longer reclaim input VAT on manufactured food stuff.
The diversified group said it operated under challenging and turbulent economic conditions during the quarter under review, with the period characterised by significant local currency devaluation and material fiscal policy changes.