SA poultry industry calls for VAT to be scrapped

SAPA Applauds Presidential Move to Exempt Essential Food Items from VAT

The South African Poultry Association (SAPA) has expressed strong support for President Cyril Ramaphosa’s recent announcement regarding the expansion of the basket of essential food items exempt from Value Added Tax (VAT). This announcement, made during the President’s opening speech at the parliament, marks a significant step towards reducing food costs for low-income households and has garnered multi-party backing.

Significance of VAT Exemption on Food Items

President Ramaphosa’s announcement aims to address the ongoing struggle of low-income families to afford basic food items. By expanding the list of VAT-exempt essential food items, the government intends to ease the financial burden on these households. SAPA has emphasized the importance of including targeted chicken products in this expanded list. Chicken, being South Africa’s most consumed and affordable meat, plays a crucial role in the diet of millions of people, especially those from impoverished backgrounds.

“Chicken is South Africa’s most popular and most affordable meat source, accounting for 66% of all meat consumed in the country. It is therefore the main source of meat protein for millions of poor people, including children in poor families,” SAPA stated.

The Role of Chicken in South African Diets

Chicken’s affordability and popularity make it a vital component of nutrition for many South Africans. SAPA has pointed out that removing the 15% VAT on chicken portions frequently purchased by low-income households would provide immediate financial relief and help keep essential food items within reach. This move would ensure that millions of South Africans can continue to access a critical source of protein without the added financial strain of VAT.

The association further highlighted the efforts of local chicken producers in maintaining low prices. Despite rising production costs, these producers have strived to keep chicken prices as affordable as possible. Removing VAT on chicken would complement these efforts, making it easier for producers to provide cost-effective products to consumers.

Historical Context and Previous Advocacy

The push for VAT exemption on chicken products is not new. The basket of zero-rated food items was last reviewed in 2018 when the VAT rate increased to 15%. At that time, SAPA proposed to parliament that specific chicken products be exempt from VAT due to their dietary significance for low-income families. This proposal included popular packs of individually quick-frozen chicken portions, a staple in many households.

SAPA’s renewed call for VAT exemption on chicken is grounded in the belief that such a policy change would significantly benefit millions of South Africans. The association has argued that targeted VAT relief on essential chicken products is a practical step towards ensuring food security and nutritional well-being for vulnerable populations.

Multi-Party Support and Government Initiatives

The President’s announcement has received widespread support from various political parties, indicating a shared commitment to tackling food insecurity and high living costs. This multi-party backing reflects a unified approach to addressing the economic challenges faced by many South Africans.

In addition to expanding the VAT-exempt basket, the government has been exploring other measures to support low-income households. These initiatives include subsidies, food assistance programs, and efforts to stabilize food prices. The inclusion of chicken in the VAT-exempt basket aligns with these broader strategies, reinforcing the government’s commitment to ensuring that essential food items remain affordable.

Potential Impact on Low-Income Households

The removal of VAT on chicken products could have a profound impact on low-income households. By reducing the cost of a primary protein source, families would have more disposable income to allocate towards other necessities such as education, healthcare, and housing. This financial relief could improve the overall quality of life for millions of South Africans, contributing to a more equitable and just society.

SAPA has highlighted that targeted VAT relief on chicken products would not only benefit consumers but also support local chicken producers. By maintaining affordability, producers can sustain demand and continue to invest in production and quality improvements. This, in turn, would contribute to the stability and growth of the poultry industry, which is a significant sector of the South African economy.

Conclusion

The South African Poultry Association’s endorsement of President Cyril Ramaphosa’s initiative to expand the basket of VAT-exempt essential food items underscores the critical role of policy in addressing food security and affordability. The inclusion of targeted chicken products in the zero-rated basket would provide immediate and tangible benefits to millions of low-income households, ensuring access to a vital source of nutrition. As the government moves forward with this initiative, the continued support and collaboration of various stakeholders will be essential in achieving the goal of a more equitable and food-secure South Africa.