SAPA asks, once again, that chicken products be made VAT-free
With President Cyril Ramaphosa looking to expand the basket of essential food items that are exempt from value-added tax (VAT) under the Government of National Unity, the South African Poultry Association (SAPA) strongly advocates for targeted chicken products to be included in that basket.
SAPA says lower food prices will alleviate pressure for low-income households, particularly as chicken is South Africa’s most popular and affordable meat source.
Chicken accounts for 66% of all meat consumed in the country.
The basket of zero-rated food items was last reviewed in 2018 after the VAT rate was raised to 15% from 14%.
SAPA proposed back then that individually quick frozen chicken portions be exempt from VAT owing to its importance in the diet of millions of poor people; however, owing to differences in the review panel, chicken was not included in the expanded list of VAT-exempt food products.
Since 2018, the need for VAT exemption has increased given sharp rises in food prices locally and globally. SAPA explains that food inflation has decreased but prices remain high.
SAPA cites the Competition Commission’s finding that more consumers are buying tinned pilchards, which are mainly imported, but VAT-exempt, while chicken is not.
Other food items that are exempt from VAT are brown bread, maize meal, samp, rice, fresh vegetables and fruit, vegetable oil, milk, eggs, pilchards and legumes.
SAPA says local chicken producers are already trying to keep chicken prices down, which, coupled with a 15% VAT removal, would ensure that this essential food item remains affordable.
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