when a consumer brings a good from one country to another either individually or via a shipment there is generally an international vat charge in addition to any import or export tariffs due internationally designated zero rated goods are not subject to international vat so the cost of importing or exporting them is lower 
some goods and services are also reported as exempt from vat these exempt goods and services are typically a focused group provided by a seller that is not subject to vat the european commission for example exempts goods such as finance and insurance services and some land building supplies other examples of exempt goods are those that serve the public interest such as medical and dental care social services and education 2zero rated goods exampleoften goods and services that are zero rated are those that are considered necessary such as food items sanitary products and animal feeds zero rating these items makes them more affordable for lower income consumers for example in 2018 an independent panel at the university of stellenbosch in south africa made the recommendation to add several items to the country s list of zero rated food items white bread cake flour bread flour baby and adult diapers sanitary products and school uniforms were some of the items the recommendation came on the heels of an increase in the vat rate in south africa from 14 to 15 a move that was opposed by many who saw it as harmful to lower income households the country s finance minister at the time nhlanhla nene appointed the independent panel which was headed by professor ingrid woolard who teaches economics at the university of stellenbosch the panel s recommendations expanded an existing list of 19 zero rated food items including brown bread fruits vegetables dried beans rice lentils maize meal milk eggs fish mealie rice and vegetable oil 3