The amendment to the Excise Tax Act will make funeral services zero-rated, meaning essential items like coffins and headstones won’t have excise tax applied to them. This is intended to relieve financial pressure on grieving families, making funerals more affordable.
Families dealing with the loss of a loved one may find it easier to afford funeral services due to the removal of excise taxes. This policy particularly impacts low and middle-income families who might struggle with the costs of funerals. However, funeral homes and service providers might also need to adjust their pricing strategies in response to these changes.
While families may save money on funeral expenses due to the elimination of taxes, the government faces potential revenue loss from these tax exemptions. Critics argue that this could lead to reduced funds for essential public services, which could ultimately affect the community. Additionally, there may be administrative costs linked to managing a new system to process these changes effectively under the Department of Employment and Social Development Act.
Supporters believe that removing excise tax on funeral services is a compassionate act that recognizes the emotional and financial difficulty families face when dealing with the passing of a loved one. They argue that this will make essential services more accessible, thereby fostering a more humane transition during a tough time. The overall aim is to support families by easing the burden during their period of grief.
Critics of the amendment express concerns regarding the long-term financial impact, claiming that while it may benefit families, it could result in a significant drop in government revenue. This loss could hinder the funding of public services that many rely on, such as healthcare and education. Additionally, the potential for inefficiencies in implementing a new reporting system raises concerns over proper resource allocation, which may negate the intended benefits of the policy.